This article highlights the five key techniques for inventory management and control. Inventory Management is “the practice of planning, directing and controlling inventory so that it contributes to the business’ profitability”. Inventory management can help business be more profitable by lowering their cost of goods sold and/or by increasing sales.
The five important techniques for effective inventory control are:
1. Demand forecasting
2. Reorder point
3. Inventory turnover ratio
4. Performance measurement
5. Cycle counting
Focusing on these five fundamentals can yield significant bottom-line savings.