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Inventory Management - Overview

2004-08-30
 

What is Inventory Management Inventory Management is the systems and processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management involves in identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.

Inventory Planning and Demand Forecasting A key to inventory planning is accurate demand forecasting. Software systems are available for predicating future demand using historical usage data. The accuracy of the demand forecasting is largely dependent on how unusual usage is treated in the demand forecasting. It is imperative that historical usage be corrected for any unusual activity. Demand forecasting is an ongoing process. Inventory management software systems can alert inventory owners at the frequencies of their preference, whether it's on a weekly, or monthly basis.

Inventory Monitoring and Balance Reconciliation Inventory Monitoring involves activities of monitoring arrival, use, shipment and disposition of inventory items to ensure the accuracy of inventory management. When a discrepancy occurs or the actual quantity physically counted doesn't match the stock level in the computer system, inventory specialists need to reconcile the discrepancy in terms of cycle counting. A cycle counting program can improve your business processes, ensuring the correct recording of material movement, proper stocking of inventory items and accurate order fulfillment.

Inventory Reporting Various reports are indispensable for inventory management. Reports can come in static or ad-hoc form. Static reports provide periodical summary of inventory items and usage. Ad-hoc reports allow users to look at inventory in criteria they prefer. The users can generate item summary report or usage summary report by product type, product line, payment methods or fulfillment options.



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