Inventory Management Techniques That You Need To Know About

1. Inventory Management Techniques That You Need to Know About

2. Inventory management techniques that work for our wholesale and distribution customers around the world

3. You can actually use in your business What we will cover are practical inventory management techniques that Our customers use

4. What Should You Care About Inventory Management?

5. Making a profit or running a loss — it’s your cash flow Manage your inventory and manage your cash flow at the same time Purchasing inventory means that you’re tying up a valuable and finite resource Indirectly managing your cash flow All the running costs of running a business

6. Downside of Inventory Mismanagement

7. What happens if you take your eye off the inventory management ball?

8. Items can’t be sold because of other reasons such as obsolescence, irrelevance or changes in styles These stocks aren’t moving but you could easily use the space and racks for other profitable products Stock will spoil and need to be discarded if you don’t sell them in time Gathering dust in your warehouse

9. Don’t forget customer satisfaction You need inventory management to manage your many locations Spend your warehousing costs in the most efficient way possible Wait, There’s More!

11. First-In, First-Out (FIFO)

12. First-In, First-Out (FIFO) assumes that the first goods purchased are also the first goods sold The most “correct” inventory valuation method as opposed to “Last-In, First-Out” SELL THEIR OLDEST STOCK FIRST TO REDUCE THE RISK

13. What’s not to like about FIFO?

14. First goods to be bought are the first to be sold may not match all businesses. Some companies stock both new and old goods

15.  Can you think of an example? How about wine and spirits? Retailers love to stock up on these because there’s no strict expiry date requirement on them

16. FIFO method gives a better, more accurate valuation of inventory on the balance sheet

17. FIFO and Inflation Don’t Mix

18. In an inflationary economic cycle, prices of goods and services are rising over time Current-cost revenue will be matched against older, lower-cost inventory THIS MEANS A HIGHER GROSS MARGIN, MORE PROFITS

19. B items with less tightly controlled and decent records C items with the simplest controls possible and minimal record keeping A items with very tight control and accurate records ABC Analysis

20. Why should you do this?

21. ABC Analysis is a way of identifying stocks that have a significant impact on overall inventory cost. ABC Analysis helps you to identify their important to your business FIFO method gives a better, more accurate valuation of inventory on the balance sheet

22. A items are very important. They are typically high value and high margin goods  B items are important but less valuable than A items C items are the least valuable and thus need only marginal attention

23. How do you assign A, B and C categories to your stock?

24. A items – 30% of these account for 60% of your revenue B items – 50% of these account for 30% of your revenue C items – 20% of these account for 10% of your revenue 80% OF YOUR REVENUE IS GENERATED BY 20% OF YOUR PRODUCTS

25. Economic Order Quantity (EOQ)

26. Economic order quantity (EOQ), in inventory management, is the order quantity that minimizes the total costs of inventory in a business

27. A = annual requirement quantity B = cost per order C = yearly carrying cost per unit EOQ = √2AB/C

28. What is the quantity of items to order each time? How much inventory to keep on hand? When do I reorder to minimise inventory costs? 1 2 3 Helps small and medium-sized businesses like yours to answer the following

29. What’s not to like about the EOQ model?

30. Holding costs (the cost of storage, as well as the opportunity cost of tying up capital in inventory) Order costs (any fees associated with placing orders, such as insurance and freight) 1 2 Inventory costs under the EOQ model is finding the optimal balance between

31. Just-In-Time (JIT)

32. Just-In-Time (JIT): Parts or raw materials are ordered as and when they are needed in the production process

33. What’s To Like About JIT?

34. You save money and conserve working capital You will have lower inventory carrying costs Don’t need to hold safety or buffer stock Enjoy continuously low inventory levels

35. JIT Isn’t For Everyone

36. Can your local supply chain stand up to such scrutiny and expectations? Will your suppliers and workers share the same attention to detail and quality like you? Just one supplier to fail to deliver materials on time, to shut down your entire production process

37. More Inventory Management Techniques

38. www.Emergeapp.Net/Sales/Wholesale-minimum-order-quantity/ www.Emergeapp.Net/Sales/Consignment-inventory-management-for-dummies/ www.Emergeapp.Net/Drop-shipping/What-is-drop-shipping/ What is Drop Shipping? How does Drop Shipping work? 5 Ways Wholesale Minimum Order Quantity Can Boost Your Volume Consignment Inventory Management For Dummies

39. We also covered the big names in inventory management, namely FIFO, ABC Analysis, EOQ and JIT we proposed that you look at other popular models today, including drop shipping, consignment and MOQ We explained why you need to adopt an inventory management technique relevant to your business Conclusion

40. WHOLESALE OR DISTRIBUTION BUSINESS Which Inventory Management Technique Will You Pick? https://emergeapp.net/inventory-reports/inventory-management-techniques/