What are the Key Elements of Inventory Management?
Several key elements are critical for effective inventory management:
Inventory Tracking: Monitoring the status of inventory in real-time to know what is available, what is on order, and what has been sold. Reorder Point: Determining the minimum amount of stock that triggers a new order to prevent stockouts. Safety Stock: Keeping extra inventory to guard against unforeseen circumstances like sudden spikes in demand or supply chain disruptions. ABC Analysis: Categorizing inventory into three categories (A, B, and C) based on their importance and value to prioritize management efforts. Just-In-Time (JIT): A strategy to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.