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Managing Stock Movement
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Inventory is most likely the largest balance sheet asset in your company. How well you plan, purchase, and manage your inventory largely determines your level of customer service and profits.
The Objective of Inventory Management
The objective of inventory management is to make inventory decisions that minimize the total cost of inventory by:
- Closely monitoring and controlling inventories, to keep them as low as possible while providing acceptable customer service.
- Maximize the level of customer service by avoiding under-stocking.
- Maintaining a wide range of inventory, but not spreading the rapidly moving ones too thin.
- Having adequate inventory on hand, but not stocking slow-moving or obsolete items.