WHAT IS INVENTORY ? AND INVENTORY MANAGEMENT?

Definitions of inventory

• a detailed list of all the items in stock
• stock: the merchandise that a shop has on hand; "they carried a vast inventory of hardware"; "they stopped selling in exact sizes in order to reduce inventory"
• (accounting) the value of a firm's current assets including raw materials and work in progress and finished goods
• armory: a collection of resources; "he dipped into his intellectual armory to find an answer"
• make or include in an itemized record or report; "Inventory all books before the end of the year"
• making an itemized list of merchandise or supplies on hand; "an inventory may be necessary to see if anything is missing"; "they held an inventory every month"

What is Inventory Management?


Effective inventory management is a crucial aspect of a successful business practice.

Inventory management is an integral part of a successful business. Inventories typically consist of goods, raw materials and finished products. Each of these elements translates into money for the business owner. The key to profitability is a carefully balanced inventory.

Balanced inventories are important because many businesses rely on its stock of items to make a profit. Stockpiles that never move from the shelves do little good for the company. A proper balance is of the utmost importance.
Mismanaged Inventories

Inventory mismanagement can be detrimental to a business, especially considering the weight these items carry. Inventories that run out of control can lead to significant losses that the company may not be able to recoup. Considerable investment is required to develop adequate stock. Poorly managed supplies lead to profit loss.
Booming Inventory Management

Properly managing supplies requires the ability to create a balance. Part of the balancing approach should include aspects of inventories that many business owners fail to recognize. Issues that may be underestimated include:

* Storage cost
* Insurance
* Taxes
* Ordering dilemmas
* Pricing

Storage costs, insurance and taxes are important aspects of stocking shelves and keeping necessary supplies at hand. These costs should be figured into the purchasing budget for the stock. The upfront purchasing costs are complicated with ordering dilemmas and pricing considerations.
Ordering and Pricing

Managing inventories can be complicated, but some considerations can make the process much easier. Management may be concerned primarily with having a balanced stock while keeping supplies readily available without overstocking the shelves. Other considerations are important as well.

* Balanced assortment of items
* Quick, efficient turnover
* Maintaining service quality
* Stocking up-to-date items
* High volume purchases
* Cost control


Successful inventory management may seem as if it requires psychic abilities, and while a peek into the future can help, managers can fare pretty well by addressing managerial performance. Creating realistic goals backed by evaluations can be beneficial. The data collected in evaluations can give managers insight into the best approach for purchasing stock in the future.
POS Software

One of the most valuable tools available to business managers is POS software. Point of Sale software offers an array of features that provide the guidance necessary for proper inventory and business management. A good program offers more than simply tracking inventories and sales.

Different programs offer different features, so it is important to consider the company’s specific needs. The right software system can save a business considerable time and money in a number of ways. The benefits of a Point of Sale software program range from inventory control to accounts receivable, depending on the program.
Technological Advances in Managing Inventories

The latest technologies for businesses offer a wide range of benefits that make managerial tasks much easier. The intricacies of balancing supplies can be as simple as reviewing a tracking summary. Collected data may include the latest purchasing trends and higher demands for specific services.

Technological advances in the realm of inventories provide the necessary tools to help managers make reliable decisions according to current trends in their industries. Software products have a significant impact on the efficiency of a company’s performance. Well-balanced inventories translate into profits and effective inventory management can be very lucrative.