What is Inventory Management

Basically the word Inventory means an ordered list that we maintain on our stock, it can be any goods or materials. Inventory management is making sure the stock is delivered properly on time by knowing where is our stock level, Inventory management act as a communication tool to know the level of stock to the sales department and help the management to take proper decisions on inventory.

Carrying cost for inventory

Major carrying cost of inventory includes the following expenses, for example, the salaries to be paid for the workers, storage space needed, hire a warehouse and of course insurance cost are very vital. The process of carry cost is calculated in the basis of stocking goods. As I said above about the costs incurred on insurance, warehouse these costs are considered as caring costs and it contributes to overall of 25 % of storage.

Benefits of inventory forecasting:

• Increased service levels, product availability, and customer satisfaction
• Helps management to take decisions on the stock
• Improved asset consumption and total inventory turns
• Customers/clients will not get disappointed as a result increased business.
• Visibility into drivers of inventory and supply chain performance
• Increased planner productivity