Inventory optimization solution
What is an inventory optimisation solution ?
What is ABC products classification ?
What are inventory parameters ?
There are several parameters that businesses may consider when managing their inventory. These can include:
- Safety stock: This is an extra amount of inventory that is maintained to protect against unexpected increases in demand or delays in the supply chain.
- Reorder point: This is the level of inventory at which the business should place a new order to replenish its stock.
- Lead time: This is the time it takes for a new order to arrive after it is placed.
- Order quantity: This is the amount of inventory that should be ordered when placing a new order.
- Carrying cost: This is the cost of holding and storing inventory, including factors such as storage space, insurance, and shrinkage.
- Demand: This is the expected or actual amount of a product that will be sold or used over a given period of time.
By considering these parameters, businesses can make informed decisions about how much inventory to carry, when to order more, and how to balance the cost of carrying inventory with the cost of lost sales due to stock-outs.