Inventory Control - Best Practices and Everything You Need - NetSuite

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Essential Guide to Inventory Control

Lisa Schwarz | Product Marketing (/portal/resource/authors/lisa-schwarz.shtml)
Everything You Need to Get Started and Become More E cient

This guide provides everything you need to get started on inventory control. The easy-to-
understand expert advice, guidance, formulas, methodologies, policy development and
software guidance will help any business—large or small. Chat
Included on this page:
Inventory control method comparisons

Advice on how to control inventory
Formulas to forecast inventory
Expert advice on optimizing, software and industry predictions
What Is Inventory(/portal/home.shtml?noredirect=T)
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Inventory control, also called stock control, is the process of ensuring the right amount of
supply is available in an organization. With the appropriate internal and production
controls, the practice ensures the company can meet customer demand and delivers
nancial elasticity.
Successful inventory control requires data from purchases, reorders, shipping,

warehousing, storage, receiving, customer satisfaction, loss prevention and turnover.
According to the 2017 “State of Small Business Report”
(h p://www.waspbarcode.com/small-business-report), almost half of small businesses do
not track their inventory, even manually.
Inventory control enables the maximum amount of pro t from the least amount of
investment in inventory without a ecting customer satisfaction. Done right, it allows
companies to assess their current state concerning assets, account balances and nancial
reports. Inventory control can help avoid problems, such as out-of-stock (stockout) events.
For example, Walmart estimated it missed out on $3 billion worth of sales in 2014 because
its inadequate inventory control procedures led to stockouts.
An integral part of inventory control is supply chain management (SCM), which manages
the ow of raw materials, goods and services to the point where the company or
customers consume the goods. Warehouse management also squarely falls into the arena
of inventory control. This process includes integrating product coding, reorder points and
reports, all product details, inventory lists and counts and methods for selling or storing.
Warehouse management then synchronizes sales and purchases to the stock on hand.
Inventory management is a higher-level term that encompasses the complete process of

procuring, storing, and making a pro t from your merchandise or services. While
inventory control and inventory management may seem interchangeable, they are not.
Inventory control regulates what is already in the warehouse. Inventory management is
broader and regulates everything from what is in the warehouse to how a business gets
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the inventory there and the item’s nal destination.
Inventory control practices and policies should apply to more than just nished and raw
goods. The following graphic shows all the things a business might manage using these
practices.
The Reach of Inventory Control: Beyond Finished and Raw Goods
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How Inventory Control Can Improve Your Business

Implementing proper inventory control procedures can help ensure a business is running
at optimal nancial levels and that products meet customers’ needs and expectations.
According to the 2015 “Global State of Multichannel Customer Service Report”, 62% of
customers have stopped doing business with a brand whose customer service was poor.
Of those customer service complaints, frustration over out-of-stock or backordered items
is high on the list. In fact, research about convenience stores shows that out-of-stocks
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could cause a store to lose one in every 100 customers completely. Additionally, 55% of
shoppers in any store would not purchase an alternate item when their regular product is
out-of-stock. Other areas where businesses incur expenses or lose sales that inventory
control practices and methods could address include:
Spoilage
Dead stock
Excess storage costs
Cost-e ciency
CompanyDecreased sales
(/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)
Losing loyal customers
Excess stock
Losing track of inventory
Losing goods in the warehouse
According to David Pyke, co-author of Inventory and Production Management in Supply

Chains (h ps://www.amazon.com/Inventory-Production-Management-Supply-Chains-
ebook/dp/B07PWY4SRL/ref=sr_1_3?
keywords=Inventory+and+Production+Management+in+Supply+Chains&qid=155829946
7&s=gateway&sr=8-3), now out in its fourth edition, and professor of operations and
supply chain management at the University of San Diego
(h ps://www.sandiego.edu/business/faculty-and-sta /biography.php?pro le_id=1350),
“owners of small and emerging businesses would be stunned to see how much help they
can get and money they can save by wisely managing their inventory. Many small
businesses are not rolling in cash, and much of their funding is tied up in their inventory.
Good practices balance customer demand and management of inventory in the smartest
possible ways.”
Tips and Expert Advice for Ge ing Started With Inventory

Control
Fully exploring the intricacies of inventory control procedures and theory may be a lot for
some businesses. The tips below can help you identify what you need to do before
implementing a new inventory control process:
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A Good Inventory Control Plan Has Several Key Essentials: Purchasing a
software system that addresses your inventory is not enough. A good inventory
control plan addresses your orders from production or purchasing to selling the
items and ultimately removing them from your books. An inventory control program
should account for things like reducing wasted warehouse space, ordering supplies
using a forecasting formula and se ing up vendor relationships.
Plan First, Then Execute: Any manager worth their salt will tell you that inventory
management and control are continuous and do not live just at the warehouse level.
CompanyYou should continually
(/portal/aboutus.shtml) update(/portal/resource/overview.shtml)
/ Educational Resources your plan, then put it into practice. You should be
tracking metrics and updating your forecasts for future months weekly and making
changes to your inventory management planned as needed. You may also be
required to change your inventory management plan based on world events.
Ensure You Always Have Critical Stock: Whether it’s machine parts or an item that
is the backbone of sales, determine which stock is critical, and ensure those items
never go out of stock. For this, you should have an inventory control process in place.
Carefully Review All Shipments: A key point of inventory loss occurs when your
business initially receives an item. Closely review packing slips and products for any
damage.
Appoint the Right Inventory Management Team Members: Sta buy-in is
crucial, but make sure those assigned to own the inventory control processes are the
right people for the job. Math should be among their strengths, and they should have
time to perform the task correctly. Ideally, your inventory management team includes
people that touch each stage of the process, from warehouse managers to
procurement specialists to pickers on the oor. Smaller businesses should consider
including all managers and some front-line sta representation.
Group Like Items: As much as possible, group like inventory in the same areas.
Further, unique products should have a single storage location.
Find the Balance Between Inventory Costs and the Bene ts of Having Stock
on Hand: Developing a truly e ective inventory control system relies on nding that
right balance between the cost of making and storing inventory and avoiding
stockouts. Your business’s money is tied up in that stock. Fortunately, ge ing to know
your business enough will enable you to choose the right methods and forecasting
techniques. You are looking to determine the total cost of your stock, including
factors like warehousing costs and perishables, and weighing that against the
demand and the cost of stockouts to give you the right balance
Look at Other High-Level Plans: If you do not have positive control over your Chat
inventory, you probably need to address other areas of your business. Do you have
an adequate quality management plan? Have you looked at your facility
management plan lately?
Choose a Scalable System: It is tempting for small businesses to order software
systems that are one-size- ts-all or, conversely, free or low-cost. Cloud-based
systems can grow with a business and provide the analytics you need to continue
your business’s growth.
CompanyYour Software/ Is
(/portal/aboutus.shtml) OnlyResources
Educational as Good as Your Processes: Software cannot solve bad
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processes, just automate them.
Have a Backup Plan: No ma er how high tech the software or well thought out the
process, ensure that your business has a backup plan for power outages and theft.
Cloud computing is always a be er option than a local server.
Actionable Advice From an Inventory Management Expert
Inventory control expert Dr. Pyke advises, “It’s been my observation that the business
world has a weak understanding of inventory management and control. They are trained
shallowly, and sometimes they apply only shallow experience to their practices.
Sometimes, that works out great. In my 30 years of experience, however, I have seen that a
lot of money can be saved by training and managing inventory control in-depth.”
“Like Toyota’s Kanban system for optimizing setups, there are obviously areas that we can
make ow be er. Companies should be proactive in their sequencing system, rather than
reactive—all while making that balance. If you look at the underlying mechanisms during
planning, you can go from there. The system you choose can vary dramatically depending
on the situation and can make all the di erence in your actual performance.”
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How to Control Your Inventory

At its core, taking stock is just the process of determining what you have and where you
store it so that you can evaluate it. Not all inventory control procedures are ideal for every
business
Company or for the varying
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/ Educational Resources of an organization’s growth and development. Some
methods are too complicated, especially for smaller companies. You should be able to use
your system to track inventory levels, create orders and send out stock. Some basic
systems for tracking inventory include:
Manual: Whether via a ledger or a stock book, manually logging inventory with a pen
and paper is the simplest way to track what comes in and goes out. Small businesses
with few items can get away with using this type of system. This system can be
challenging because it is an actual record that you cannot mine and use for planning
purposes.
Stock Cards: A slightly more complex method uses stock cards, also called bin cards.
A stock card is a table that records the running unit price, sale price and inventory
count of each product. Use individual cards for each product in large warehouses or
stock rooms. The system also tracks purchases, sales, returns and other reasons to
withdraw stock, such as promotional withdrawals. You can include additional notes on
the stock card, such as any problems associated with that item. For a stock card
system to be e ective, consistent updates are critical. You must also record unusual
stock pulls; otherwise, you run the risk of inaccurate data.
Simple Spreadsheets: Many companies, especially small businesses, use
spreadsheets to track inventory. Whether they use Microsoft Excel or something
similar, spreadsheets are a way to start automating and electronically capturing
product data. With consistent updating and basic coding, you can ensure that you
have available current inventory levels and statistics. Businesses quickly customize
these systems to meet their needs. Since everyone who builds a spreadsheet does so
slightly di erently, users will need intimate knowledge of how the sheet works. This
method is also thought of as manual because the only way to automatically update
the spreadsheet system is by adding high-level macros or coding that connects them
with other systems.
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Basic Inventory Software: Simple inventory software is usually low cost and
targeted to small and medium-sized businesses. This simple automation is often
cloud-based and ties into your point of sale software, so it can generate real-time,
automatic stock updates. You can also incorporate analytics and reporting and run
cost comparisons, create reorders, identify best and worst-selling products and drill
down to order details or customer pa erns. Some simple inventory management
software systems can scale to more complex functionality as your business grows.
Some businesses prefer to stick to the simple systems of keeping track of inventory. Other
companies plan for growth and scaling. You could also track inventory with:
Advanced Software: Designed for tracking inventory, most of these targeted

software solutions can integrate with existing software, are scalable and provide
analytics and templates. Advanced software is now in reach for many small and
midsize businesses because it is no longer cost prohibitive.
Types of Inventory Control Systems

Inventory control and monitoring systems are accounting approaches to track the number
of goods on hand. Big companies often monitor inventory across stores, warehouses and
even websites. The two main systems are periodic and perpetual tracking systems.
The Periodic System vs. the Perpetual System
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The Periodic Inventory System

Most small businesses still use periodic inventory management because it does not
require sophisticated software or inventory scanning. A periodic inventory system
(/portal/resource/articles/inventory-management/periodic-inventory-system.shtml)
relies upon occasional or regular physical counts of the inventory. You decide accounting
periods based on the business needs, but you don’t track inventory daily or continuously.
Instead, you record all purchases to a purchase account. Once you conduct the physical
inventory, you shift the balance in the purchase account into the inventory account. Finally,
you adjust the inventory account to match the cost of the ending stock. You can calculate
the cost of ending inventory using either FIFO ( rst in, rst out) or LIFO (last in, rst out).
The challenges of the periodic system are especially apparent when performing a physical
inventory count. Most normal business activities must be suspended during this time
because it requires signi cant manual labor. Many companies hire additional sta and try
to perform this outside of regular business hours, such as during a night shift. This type of
system incurs more fraud because there is nothing tracking inventory between physical
counts, reducing accountability between inventories, and because it is more challenging to
determine where any inventory discrepancies occurred.
The Perpetual Inventory System

The perpetual system (/portal/resource/articles/inventory-management/what-is-
perpetual-inventory.shtml) may be more expensive to implement than the periodic system
due to equipment and software needs. However, the system continuously and
immediately updates inventory numbers. This system calculates inventory based on sales
and purchases via the point of sale and asset management software. This way, you have
accurate stock on-hand accounting at all times. Perpetual tracking is the best way to avoid
stockouts when your customers deplete inventory on a particular product. With a
perpetual system, you can achieve minimal employee contact with the goods. Chat
The challenges of this type of system occur when you use it without also performing
physical inventories. In other words, the recorded inventory may not accurately re ect
what is physically in-stock as time goes by, never mind accounting for drop shipments or
inventory on order. You must account for breakage, stolen goods and loss to ensure the
system is accurate. Further, errors and improperly scanned items a ect the inventory
records. You can handle this mathematically by applying corrections that mostly account
for these things. Experts agree, though, that even though physical inventories are not
common,
Company you should
(/portal/aboutus.shtml) implement
/ Educational some
Resources manual stock taking process to complement a
perpetual system. You can integrate these types of systems with supply-chain automation
to make quicker decisions informed by data.
Barcodes
Barcodes can be part of either a perpetual or periodic inventory system. Some may
consider the barcodes part of an inventory management system, but in truth, this is
equipment that falls under your existing inventory management system. A barcode is
essentially a li le picture with text or numbers that gets put on each stock item. The text or
numbers store a large amount of information. A scanner reads that information and
transfers it to a database, which tracks the parts and their locations. The system performs
scans when the new inventory arrives and when it is issued out. Barcodes have a rapid
return on investment (ROI) by lowering operating expenses once implemented, even for
small businesses
(h ps://pdfs.semanticscholar.org/9539/771945831a5a546fc81209eed858cb054d31.pdf).
Other bene ts of barcoding include:
The elimination of manual data errors

Faster collection of inventory information
Automatic inventory updates
Streamlining of documentation and reporting
Enabling inventory movement between multiple warehouses and departments
Easy and quick identi cation of minimum levels and reordering of necessary levels
Implementing barcodes on inventory is a smart idea because they o er scalability and

accuracy, even to small and growing businesses.
Radio Frequency Identi cation (RFID)

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RFID tags are also a type of equipment that falls under an existing inventory management
system. RFID tags are a type of smart tracking. RFID tags contain electronically stored
information, more information than is possible with conventional barcodes. Tags can be
passive or active: Active RFID tags include ba eries, whereas passive tags do not have
ba eries. The RFID reader supplies the power for passive tags through radio waves,
whereas active tags send out their radio waves. Both types of tags automatically update to
identify
Company the stock and
(/portal/aboutus.shtml) capture
/ Educational any (/portal/resource/overview.shtml)
Resources associated data.
RFID tags are an e ective way to protect high-value items and products that require
additional security compliance, such as pharmaceuticals. Active tags are the best course in
businesses where inventory security has been an issue.
Although security is the primary bene t of RFID, other features include:
Remote Tag Reading: The reading range for passive tags is approximately 40 feet,
and the range for active tags is 300 feet.
Simultaneous Tag Reading: The system can read several tags simultaneously so
that it can check in an entire pallet of products at once.
Unique Tag Codes: To track unique products, not just one type of product, you can
give tags unique identi cation codes.
Constant Updates: Without having to update the physical tag on the item, you can
send it updates such as warehouse location via your active tag or by keeping the
passive tag system activated.
Some challenges with using RFIDs include:
Passive RFID tags require scanners or handheld readers.

The cost can be prohibitive for some businesses.
The supply chain also needs the equipment necessary for RFID tags.
If you are considering using RFID tags, they have become cheaper in recent years. Experts
say the best use of RFID tags is to place them at high-risk points close to your stock, such
as at exits. Finally, for products with a limited shelf life, an RFID system can provide
information to ensure quality control, such as when they were brought in and their
expiration dates(if relevant).
A recent trend among small businesses is the use of QR codes, which are like barcodes,
but you don’t need to buy expensive equipment to read them. You can install an app on a
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smartphone that reads QR codes. They also carry more information than a barcode
because of their matrix-like pa erns. QR codes are not active systems like active RFID tags
and not nearly as expensive.
Methods of Inventory Control
Inventory control methods are the ways you use your business’s strengths and
relationships, your expertise, formulas and forecasts to determine how much supply you
keep, sell, store and order. E ective inventory control balances controlling costs and
meeting customer demands.
A company’s days of inventory outstanding (DIO) measures how many days a company
holds stock before selling it. The DIO is an e ciency measure because inventory ties up
funds. The lower the DIO the be er, especially for a small business. DIO scores have
increased in the past ve years by 8.3% (h ps://www.dol.gov/general/topic/statistics),
meaning that companies have poorer inventory control practices. Additionally, there is a
need to increase warehouse space, which means…
The Correlation Between DIO and Warehouse Space
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The most e ective inventory control methodology can vary between companies.
Whichever methodology you choose, it should be clear to employees and have well-
de ned policies and procedures. If you use software with your methodology, look at
systems that boast the key features your company needs, not just a one-size- ts-all
package. Organizational control starts with labeling items, whether via SKUs or a more
complex system. Quality control requires having quality standards and policy for sta to
follow.(/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)
Company
Inventory control best practices include:
Choose a Management Improvement Methodology: Management improvement

methodologies involve more than just inventory control. You can improve your
business, from top to bo om, with a management methodology that you commit to.
Examples include Kaizen, Lean and Six Sigma.
Optimize Purchasing Procedures: One of the hallmarks of proper inventory
management is ensuring that you use data and forecasting to control your
purchasing procedures. This also includes identifying items by monitoring customer
demand, removing obsolete stock and adjusting safety stock and reorder points.
Manage Supplier Relationships: It is critical to manage supply chain relationships
well because you can often head o and solve problems by working closely with
suppliers. For example, suppliers can o er your business a negotiable minimum
order quantity, take back products that are not selling and help you quickly restock
when sales accelerate for a speci c product.
Create Automated Reports: Since inventory control and management systems
produce massive quantities of data, businesses need to nd ways to analyze, report
and use this data. Many systems automatically generate reports for inventory status,
stock logs, reconciliation, historical stock, aging inventory and inventory nancials.
Further, companies should decide at what point along their supply chain they should
share these reports, so suppliers can adequately prepare.
Conduct a Risk Assessment: Problems regularly crop up in businesses, whether
you have an unexpected sales spike, a cash shortfall, not enough warehouse space,
an inventory miscalculation, slow-moving products or discontinued products.
Prepare a risk assessment matrix to determine what your worst risks are and how you
can address them when they occur.
Regularly Audit: Conduct regular audits to ensure that your actual stock and reports Chat
line up. There are three ways to perform an audit: physical inventory, spot checking
and cycle counting. A physical inventory requires counting all your inventory and
should be performed at least annually and often at the end of the year to line up with
income tax reports. Spot checking is when you choose a product or two at a di erent
time from the full inventory, physically check it and compare it to what is in your
documentation or software system. Problem or fast-selling products are ideal for spot
checking. Cycle counting spreads out the reconciliation throughout the year. Each
product has its audit period, but you should check high-value items more often. For
Companymore information
(/portal/aboutus.shtml) on cycle
/ Educational counting,
Resources see “Using Inventory Control Software for Cycle
Counting” (/portal/resource/articles/inventory-management/using-inventory-
control-software-for-cycle-counting.shtml).
Selective Inventory Control (Forecasting): Many techniques fall under selective
inventory control and management or forecasting, such as ABC analysis. In this form
of analysis, you classify the inventory with one of the following: usage value,
procurement source, procurement di culty, seasonality, unit price and rate of
consumption. Choose a formula based on the relative importance of each
classi cation and how much it a ects the stock.
Management Methodologies Used in Inventory Control

Many inventory control and management methodologies are relevant to all industries,
whether you are a shoe retailer or a big oil company. The di erent management
methodologies:
Lean Manufacturing: Lean manufacturing is a high-level management philosophy

that delivers customer value through driving manufacturing e ciency. Lean
manufacturing also uses Kanban, a basic, scalable and visual scheduling system.
Workers can visualize all tasks in a project under one of the headings: To Do, In
Progress and Done. This process highlights any bo lenecks or backlogs by their lack
of movement from one column to the next, so you can address them.
Six Sigma: Among the most well-known management techniques is Six Sigma. The
methodology’s intent is to reduce the probability that errors or defects will happen
using the continuous process improvement techniques of de ne, measure, analyze,
improve and control (DMAIC). Falling back on these basic management principles,
practitioners can work with Six Sigma and other inventory control methodologies to
decrease issues like stockouts and improve on-time production and delivery.
Lean Six Sigma: Combining Lean and Six Sigma, this technique focuses on waste-Chat
reduction and product defect-reduction. Lean Six Sigma is especially useful for
nding and eliminating root causes of supply chain and inventory management
waste. Using the combination of techniques, you can nd ways to make
improvements such as reducing inventory costs and improving your stocktaking
process.
Methods to Replenish Stock

There are many ways to control stock, whether you use techniques that specify when to
order, forecasting formulas or selling and storing techniques.
Ways toSolutions
/ Business control stock
Articles by when or how you order/ goods
(/portal/resource/business-solutions-articles.shtml) or tomaterials
Essential Guide include:
Inventory Control
FIFO and LIFO: These are methods of placing value on the products. LIFO assumes
that the goods last added to the inventory are the rst goods to be sold, while FIFO
assumes that the goods rst added to the inventory will be the rst sold.
Min-Max Inventory Control: This theory sets minimum and maximum levels of
stock to maintain speci c items in your inventory. So when you get to the minimum
level of stock, order only enough to reach the maximum level set. Critics of this
approach say that you may end up with either too many or too few products.
JIT Inventory: The just-in-time (JIT) inventory management strategy lines up the
raw material order from suppliers with the production schedule. You decrease waste
in the form of inventory cost because the goods are onsite only as needed. JIT can be
a step in Lean manufacturing by slightly requiring JIT to incorporate what the
customer wants in each product manufactured. The risk with this method is running
out of stock due to ine cient suppliers, but supplier relationship management can
somewhat mitigate this risk.
Two- or Three-Bin System: A two- or three-bin system involves two containers of
the same stock item. When one container becomes empty, you use the second
container (the backup), which then identi es the reorder point (ROP). The ROP is
when inventory gets down to a level that initiates stock replacement activities. The
problem with a method this basic is evident in situations where there are big or fast
orders. You may never be exactly sure how much product is in stock at a given time,
so you may not be able to predict whether you can ful ll a large order or quick,
successive orders.
Fixed Order Quantity: In a xed order quantity rule, you may only order a speci c
amount of an item at one time. With this rule in place, reorder mistakes, storage
space issues and unnecessary expenses are kept to a minimum. You may link xed
order quantities to automatic ROPs. Chat
Fixed Period Ordering: In a xed period ordering rule, you link the replenishment of
speci c items to a particular interval. In this case, the order quantity is always di erent
to compensate for customer demand.
Vendor-Managed Inventory (VMI): In this method, it’s often the sales
representative that manages the stock on speci c products, noticing and ordering
what needs replenishment. For example, a beverage company representative who
performs deliveries reviews the stock and space available for their products in the
store and replenishes it themselves.
CompanySet Par Levels:
(/portal/aboutus.shtml) When inventory
/ Educational drops below the par levels, your software should
Resources (/portal/resource/overview.shtml)
signal you to order more. Par levels vary by product, relative sales rates and the time
to restock and require research and sound decision-making. Par levels change over
time and must be reset at regular intervals. On the positive side, having minimum
levels makes your business more e cient and exible. When new products hit the
market, you can purchase them because your funds are not completely tied up in
existing inventory.
Further, storage costs are lower, and if your business moves fast, having only the
minimum levels of stock may be more suitable. Some challenges you may face
include possibly running out of stock, when ordering the minimum could be more
expensive and the variability of how well your suppliers can deliver products quickly
and e ciently. You should also have a safety stock alongside your minimum
inventory. Safety stock is the stock you keep in excess in case there are delays in
delivery. You use this stock only in case of emergency.
Stocking Methods Compared
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Control Stock With How You Sell It

You can also control stock with how you sell it. In some cases, the stock is not even a part
of your onsite inventory, but you can still control it. Here’s how based on when or how you
sell your products:
Bundling: Combining goods or services to o er the customer extra value for one
cost is called bundling. In inventory control and management practice, bundling is Chat
a
way to move aging inventory. For example, you include a surprise free gift or o er a
reduced price on another item based on a purchase. These techniques also improve
your customers’ experience.
Rolling Inventory: When inventory is rolling, instead of storing goods inside a
warehouse, managers leave it in the truck trailer and store that trailer in the
warehouse parking lot. A driver can hook up the trailer when the stock is needed and
drive it to the retail store. Warehouse employees never touch the inventory.
CompanyDrop Shipping:
(/portal/aboutus.shtml) Also known
/ Educational Resources as cross-docking, drop shipping is when a manufacturer
or supplier directly ships its products to customers on behalf of the retailer. The
retailer never has the product in stock and never handles or sees the product. These
businesses mostly work via internet sales.
Consignment Inventory: This business arrangement occurs when a company gives
its goods to another company or storefront before they pay for them. The storefront
or company pays for the products once it sells them, for an agreed upon percentage
of the sale price. This arrangement can be an excellent situation for small businesses
that are selling the products because their cost of ownership is minimal.
Backordering: When a company decides to take orders and payments for products
that are not in stock, they are taking backorders. For a small number of items (one or
two), it is easy to process the order and inform your customer with a forecast of when
you will ful ll it. Further, the higher the value of the item, the more patient your
customers will be with backorders. Problems mount, however, when the backordered
products start to multiply. It is not recommended that small businesses whose
products are generally stocked on-site mix with many backorders. Positive reasons to
o er backorders include increasing cash ow, adding some exibility for small
businesses not capable of handling the logistics and lower holding and overstock
costs. Challenges of backordering include possibly disappointing customers, longer
ful llment intervals and other logistical requirements.
Methods to Sell or Store Stock Compared
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Forecasting for Inventory Control

Instead of using a manual method to reorder, look at ways to mathematically forecast what
is in stock or when to order. These methods can include categorizing your stock, such as
in the ABC method, but mainly show what you currently have in store:
ABC Analysis: This method of supply chain forecasting divides all on-hand
inventory into three distinct groups. “A” items are those of high value and low sales
frequency. The budgetary impact of these items is signi cant, but their sales are not
predictable. “B” items are those of moderate value and moderate sales frequency. “C”
items are those of low value and high sales frequency. These items require less
oversight due to their lessened monetary impact and constant turnover. Using these
delineations for inventory helps you prioritize by separating out products that need
more a ention than others. Forecasting done with ABC analyses calculates the
number of stock available based on this delineation. Additionally, storage and Chat
packing locations can be set up to re ect these delineations.
Reorder Point (ROP) Formula: The ROP formula mathematically tells you the right
time to order or produce more stock. Using existing information, calculate the sum of
your lead time demand and safety stock. You may need to know the reorder lead
time alongside this formula, which is the time between placing an order and when
you receive it. You must account for the lead time when calculating order timing. The
formula for reorder point is:
What ROP Means
Let’s say that Ava has to calculate the ROP for the liquid bandages her company Chat
manufactures in its facility. She calculates the safety stock (SS) for this product at 50 units.

She then calculates the Lead Time Demand (LTD) for that product.
Her manufacturing department uses 20 units of raw materials per day, and it takes about
ve days for a reorder of those materials to arrive.
Using this information, she can calculate the ROP:
Chat
If stock for liquid bandages falls below 150 units, then Ava must place a reorder.
Follow this handy chart to calculate your ROP:


“Inventory management gets complicated very quickly, explains Dr. Pyke. “For example, a
reorder point model has a trigger. So, the order xed quantity is hopefully set up in a way
that optimizes the trade-o s involved (i.e. too much versus not enough). When I am
helping a business, this is where I usually start their training. Moreover, problems often
come in manufacturing when there are lags between the startups and process
changeovers—for instance, an ice cream manufacturer changing over from chocolate to
vanilla versus vanilla to chocolate. In the la er example, going from vanilla to chocolate,
there are fewer complications and problems. Also, chocolate covers over a multitude of
sins! However, when you go from the more complex (chocolate in this scenario) to the less
complex (vanilla) process, it can take longer and add unnecessary layers of complexity.” Chat
Economic Order Quantity (EOQ): The EOQ determines the optimal amount of
inventory you should buy or produce to make the costs of ordering and storing
minimal. This formula is useful for when the demand, ordering and holding costs are
consistent over time. You can modify the EOQ formula to compensate for di erent
production levels or order intervals.

What EOQ Means
Let’s say that Ava wants to know the optimal number of size 12 glass bo les she wants to
have in-stock for production. They are quite costly to purchase and store, so she must
calculate the EOQ. Ava’s production team uses 1,000 size 12 glass bo les annually. It costs
her rm about $3 per year to hold that bo le in inventory, and the xed cost to place an Chat
order is $5. Therefore,
What EOQ Means


The ideal order size to minimize costs and meet customer demand is a li le more than 33
size 12 glass bo les. Now that you have the ideal quantity, you can also use the ROP
formula to determine the perfect timing to order these size 12 glass bo les.
Follow this handy chart to calculate your EOQ:
Chat
Supply Chain Inventory Control

There are some options for controlling your inventory along the supply chain. Whether
you are on the production side or within the warehouse, these techniques can help.
Supply Chain Inventory Control Techniques
Batch Control: To control inventory you are producing, you can execute batch
control. This method produces goods in batches sized to ensure that the right
amounts of components are available to produce the required number of the
nished product. Batch control is especially useful in concert with methodologies
such as Lean manufacturing and just-in-time. Batch control procedures save money
and resources.
Third Party Logistics (3PL): Some companies outsource portions of their supply
chain, such as in their warehouse, distribution or ful llment services. Outsourcing
may occur at certain times of the year, such as during the holidays. 3PLs turn over
employees constantly, especially when they only hire them seasonally. These
inexperienced employees can account for a signi cant amount of lost or missing
inventory.
Bulk Ordering and Shipping: One way to manage costs is to order items that you
consider evergreen in bulk. You can also ship evergreen items in bulk at a discount.
Companies lay out more money in advance, but since the items sell quickly and
steadily, the risk is low. Bulk stock is easier to manage because of the product
consistency, making the management costs lower. Manufacturers o er a discount
when ordering multiples of the same product, making the products cheaper. This
option may be suitable where the demand is di cult to predict. However, bulk
ordering means higher storage costs, is challenging for perishable goods, can lead to
obsolete stock and ties up capital.
Stocking Methods Along the Supply Chain Compared
Chat

Stock Quantities: How Much to Keep

The type of stock (raw, un nished, nished or consumable) you have can also determine
how much you should keep on hand.
For raw stock, look at the following factors:
The reliability of the supplier and alternate sources of supply

Chat
Whether you produce and deliver the components in batches
The predictability of demand
Bulk discounts
Un nished stock, also called work-in-progress (WIP), costs you in storage space but is
often bene cial. You can add an extra level of protection to your production with
un nished stock. For example, if you have a machine in the middle of a process that is at
risk of breaking down, you can pull the un nished stock to bypass that part of the process.
Keep extra nished stock around when you identify a product’s demand or when you are
con dent
/ Business thatArticles
Solutions your batch productions are adequate.
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/ Essential Guidewould also
to Inventory naturally have extra
Control
nished stock around when you are completing a large order.
How much consumable product stock you should keep around also depends on the
reliability of your suppliers. If the demand for those products is well-known and steady,
you may want to keep extra. Further, if you expect price rises or get a signi cant discount
for bulk buying, having additional consumable stock is acceptable.
Inventory Control Policies and Processes

Inventory control starts the moment goods enter your organization, whether through the
front door or via a receiving dock. Developing standard operating procedures (SOPs) can
help everyone understand their responsibilities related to stock. SOPs are step-by-step
instructions that de ne routine activities.
What to Include in an SOP

In the case of inventory control, the SOP should, at a minimum, address:
Receiving goods and supplies

Storage and tracking
Inspection dates and rotation
Security
Shipping
If you are developing new SOPs, clearly de ne policies and processes, and ask sta
members (especially new ones) to review them for understandability. Additional tips for
Chat
inventory control policies include:
Separate Administrative Inventory Control From Accounting and Finance: For

security purposes, the sta who handle the administration of inventory control
should not be the same personnel who perform stock controlling duties in nance or
accounting.
Prioritize Accurate Inventory Counts: Problems occur when trying to ful ll an
order with an unknown or inaccurate amount of inventory in stock. Inventory
accuracy is a higher priority than order ful llment.
Choose the Right Tools: Before drafting your processes, determine what risks are
inherent and acceptable in the type of tools you choose. Whether you use dedicated
software, RFID tags or spreadsheets and bins, de ne your systems rst.
Perform Continuous Improvement: To ensure continuous improvement, you must
include it as part of your SOPs. Even a short section on the expected intervals for
review provides a place for sta to start.
Consider How Often You Need to Conduct Stock Counts: There are three distinct
ways to conduct stock counts: periodically, perpetually and a combination of
perpetually and periodically. Decide on the intervals, and write them into your SOPs.
Factor in All Equipment: As you write your policies, consider the tools available to
set realistic expectations. For example, if you want your physical inventories
completed over a weekend, determine if your employees should have scanners that
expedite their work.
Determine, at a Minimum, Annual Stocking Policies: At the bare minimum,
annual stocking policies should include the maximum and minimum levels, safety
stock levels and optimum reorder levels. You should also calculate your average
inventory levels to help set these policies.
Prepare an Annual Inventory Budget: Before buying any inventory, and at least
once a year, determine your annual inventory budget. This estimate is the total cost
of ownership of the goods for the year, including the costs of materials, holding, xed
operation, logistics, redistribution and any miscellaneous items.
Basic Invoice Control Policies

E ective invoice control policies should inform sta about how your business invoices
customers, including the schedule, forms and procedures. Developing reliable basic
invoice control policies and procedures ensures you collect the hard-earned income from
Chat
your products or services. Invoices are typically sent after order ful llment. Your invoice
policies can be templates and should be clear and simple so that sta can follow them
without many issues.
The invoice types you need to control are:
Purchase Orders: Before processing an order, clients or sales sta submit purchase
orders. These documents should be completed and signed by the customer,
ensuring that all details are accurate.
Order Receipts: Policies around an order receipt should re ect the set of checks you
perform upon delivery of a product. These checks should kick o invoicing and
include the shipment tracking numbers and receipt paperwork.
Invoicing Processes: Templates are ideal to use for invoicing, especially if your
software automatically creates them. Policies around invoicing should ensure the
purchase order number, invoice date and include all the required payment details.
Software: If your customer base is large or growing, consider investing in invoicing
software. Create policies that help support the development of a template, and
ensure the software tracks and archives all transactions. Software can also make
generating unpaid invoice reports more e cient and straightforward.
Past Due Payments: Inform all customers of your late payment or nonpayment
policy. Be exible, but ensure that these documents re ect the consequences. For
example, explain grace periods and procedures about who follows up on tardy
invoicing and what leeway they have so customers can make their own decisions
about paying an invoice late.
Inventory Control Processes

Inventory control processes are the actions and techniques you use to organize inventory
and measure the gaps, opportunities and relative success of ordering and production.
Many companies use KPIs to measure the success of their processes and procedures.
Some companies are so worried about not having enough inventory, they overstock,
which costs them more than just the price of goods. Since they tie up their capital, they
must store their products at a cost, and they can become damaged or depreciated. Break
down your inventory into three basic categories:
Chat
Safety stock
Replenishment
Excess and obsolete
When developing inventory control processes, determine if you should also

simultaneously perform a business assessment. You should assess business functions
and processes, particularly in the order-to-delivery (OTD) process, in the as-is state to
identify the gaps and opportunities for change. Change management principles should
take you from the as-is state through the implementation of your to-be changes. If you
want to
Company serve customers
(/portal/aboutus.shtml) be Resources
/ Educational er, determine how your inventory control policies and
processes a ect them.
Key Performance Indicators in Inventory Control

Key performance indicators (KPIs) are metrics that demonstrate how well portions of your
company are functioning and how well you are achieving your key business objectives.
KPIs are also useful for comparing your business to others in your industry. In inventory
control, KPIs can help identify pain points and why you are losing money. If you are having
stockouts, you will want to x them so you can keep customers. You will want to look at
your long-term and short-term goals using KPIs. Therefore, certain KPIs make sense to
run regularly. For example, a stock-to-sales ratio is one KPI that can track forecasting:
Another KPI is sell-through-rate (STR), which helps retain customers. Use the STR as a
metric to identify how long a product is in stock, if you need to reprice it and when to
reorder. This metric is often compared to the inventory turnover rate, which has a longer
period to calculate (often a full year). The sell-through-rate KPI compares stock received
through a supplier to determine how much you sell monthly:
Chat
Average inventory is a KPI that helps you understand how many products you are storing
over speci ed periods:

Finally, the ll rate is a KPI that tells you how well you ful lled your orders for single
deliveries or for deliveries over a given time. This KPI is also called line item ll rate (LIFR),
with the term “line” referring to the line on an order or manifest. The formula for LIFR is:
Another formula that determines LIFR is:
A ful lled order is complete when it is at 100%. For example, Jack Heinz orders four
products:
Chat

This company shipped lines one through three (the seamless carbon steel pipes, copper
pipes and plastic trench drain with grates) on May 20, 2019. When the company ran the
LIFR, it was noted as 75%, because there were four line items, of which only three were
lled:
The company shipped out the 90-degree threaded ing on line four on May 24, 2019,
bringing the LIFR to 100%. However, if your metric focuses on customer satisfaction based
on ful lling orders immediately, keep the metric for only the initial rate. The initial LIFR is
75% and undoubtedly provides more information than the nal LIFR.
Chat
You can also calculate ll rates by case and value. When you expedite items outside the
total shipment, you cannot count those non-expedited items as having been misses, and
you should factor out the expedited items. In other words, your primary concern should be
how your business lls orders regularly, not during exceptions. For more KPIs to track, see
“3 Critical Inventory Accounting Metrics You Should Be Tracking.”
(/portal/resource/articles/inventory-management/inventory-accounting-metrics.shtml)
Inventory Control Software

Manually controlling inventory has its challenges: It can be labor-intensive, di cult to

share, prone to human errors, create excess paperwork you do not need and require
continuous monitoring and fact-checking.
According to Dr. Pyke, one software solution doesn’t t all organizations. He says, “there
are systems that integrate with existing ERP (enterprise resource planning) systems. Some
organizations have developed their own systems, taking their best thinking, and
developing what they need exactly in-house. When I consult, I often help small businesses
develop their own spreadsheets to start. One of the companies I advise is a large software
company, and their software is excellent and can do major things for their company. These
systems do exist for smaller companies, but there are also inexpensive options that can do
just as good a job.”
4 Questions to Ask Before Buying Advanced Inventory

Tracking Software
If you are starting to look at advanced software to track inventory, you will need to
approach it carefully and thoughtfully. Choose inventory control software by answering
four main questions:
1. What products and quantities of products do I need to manage?

Your software needs will absolutely be di erent, depending on what and how much
you sell. For example, the software priorities are vastly di erent for companies that
sell food versus one that sells high-end electronics. Food sales companies need
software that can track expiration dates. Companies that sell high-end electronics
require software with security features and analytics that ensure their stock does not
become obsolete.
2. What are the critical features I need? Chat
Some software systems will integrate with existing systems, but some will not. It’s
critical to decide whether you need this integration or if you will build in the additional
costs to replace the software. For more information on software integration, see “The
Bene ts of Integrating Your Inventory Software with Your Accounting and Back-O ce
Processes” (/portal/resource/articles/inventory-management-software.shtml).
Further, let us assume that your business has a trajectory of massive growth within
the next ve years. In that case, select software that can scale.
3. What can I pay for software?
Software systems that target inventory control can di er wildly in cost. Good
salespeople can quote a price based on your requirements. In that bo om line,
include any other software that needs to change to accommodate the new purchase
and the cost to transition in sta time. Calculate the return on investment (ROI) for
every solution you review and how long it will take to recoup that investment. For
more information on lowering your costs, see “Lower Your Costs by Using Inventory
Tracking Software.” (/portal/resource/articles/inventory-management/lower-your-
costs-by-using-inventory-tracking-software.shtml)
4. What does software mean for sta ng?
Determine if your current sta can adapt to vast changes in how you do business.
Then decide if you need to hire new sta with di erent skill sets, reassign or retrain
your current team. For example, if you employ many low-skilled workers to count
inventory, you may not need them with a perpetual inventory system. Further, they
may not be able to help you set up your new software or troubleshoot it after
installation. You may need to hire a sta member with technical software skills,
depending on the complexity of what you buy. If you can reassign loyal sta
members to other jobs or train them for the software, excellent. Otherwise, consider
what your business needs are rst.
Ge ing Started With Inventory Control Software

To e ectively control your inventory, you need item-level visibility—something software
can provide if you use it consistently. In this case, consistent use means that every sta
member uses it the same way every time they produce, sell or receive goods. Software can
provide many things at your ngertips. For example, you always know what’s been sold
and how fast, any unique o ers and discontinued products. You have an electronic version
of each transaction, which can include the part number, quantity and when and where you
Chat
sold it. For more information on why to buy inventory control software, see “Lower Your
Costs by Using Inventory Tracking Software” (/portal/resource/articles/inventory-
management/lower-your-costs-by-using-inventory-tracking-software.shtml).
Other advantages of having dedicated inventory control software include:
Increase in pro ts
Never have stockouts
Barcodes and label track inventory
No more inventory write-o s
Quick and e cient auditing
Saved time
More system exibility
Quick information retrieval
Built-in analytics for decision-making
To get started, look for the software with features that support your business’s needs and
future.
When looking for new inventory control software, consider these features:
Inventory optimization parameters

Tracking and forecasting tools to signal stock anomalies
Tools that automate replenishment, including those that calculate the right stock
levels
Lead time management
Safety stock calculations
Cost management
Logic to call out expired shelf-life and slow-moving products
Support across multiple locations
Back o ce software integration
Automatic inventory monitoring
Automatic batch controls
Supplier data metrics
Barcoding integration
RFID system integration
Multiple pricing for items, based on the customer
Pricing in di erent currencies
The option to update per item or per item group
Multiple warehouse communication Chat
Quality control metrics

Batch tracking
Support for multiple users
When looking at any system, it’s important to keep in mind future needs and how
technology can help. Dr. Pyke shares, “There is a big animal called forecasting coming.
Everyone
Company wants to predict
(/portal/aboutus.shtml) everything
/ Educational underlying every purchasing decision that
consumers make. Machine learning and the vast data amounts will only make the ability to
forecast be er. Taking advantage of that ability in a way that does not cost too much is the
future of this industry.
“Blockchain in the supply chain is also up-and-coming. You do not need blockchain to be
valuable, but the visibility to what is out there will improve. Over time, it will be interesting
to see what is real and what is hype, but it all will have an impact, regardless. My advice is
for businesses to sit on the sidelines for a bit and see what happens. Eventually,
companies will be able to use it for improvements in inventory management.”
For more information on features you should look for to support your business, see “3 Key
Features to Look for When Selecting Inventory Management Software.”
(/portal/resource/articles/inventory-management/features-to-look-for-when-selecting-
inventory-management-software.shtml)
The Best Practices of Using Inventory Control Software

Whether you use a dedicated software system or spreadsheets, you still need to follow
some best practices. Use whatever tools are on hand to optimize inventory levels.
Once you have inventory control software set up, follow these tips:
Use platforms that talk to each other or have everything under the same system.
Treat each item in your inventory di erently; each SKU is di erent for a reason.
Ensure your supplies are above board by using the available data.
Use mobile devices when possible.
Slot your inventory.
Perform cycle counts and update the data in your system.
Link all transactions to your software.
You should also ensure that you do not purchase something too complicated for what Chat
your company needs and that the software is worth the cost. If you don’t, it’s not just a
waste of money, but you could end up needlessly frustrated. If your software comes with
analytics capacity, though, make sure you perform the measurement.
If you bought or are looking to purchase inventory control software, use it to perform the
following calculations:
What products are selling and not selling
Total inventory costs
Inventory trends and sales data
The inventory budget
For more information on choosing the right inventory management system, see
“Choosing the Right Inventory Management System.”
(/portal/resource/articles/inventory-management/choosing-the-right-inventory-
management-system.shtml)
How to Keep Your Stock Secure

Ensuring your stock is secure should also be top of mind when thinking about inventory
control. Whether your concern is thieves and shoplifters or your employees, stock security
a ects the bo om line. To protect your goods from people who would steal them out your
front door, identify which inventory is the costliest or the most desirable. For example,
laundry detergent and razor blades are high-target commodities. Everyone needs them;
they are sure to resell and are amongst the most stolen items in any grocery store. These
products should be accessible to customers but placed in a high-visibility place if you have
problems with theft.
You should t expensive, high-end items such as computers and electronics with RFID
tags that can add security. An alarm will sound if they are removed. Be sure to secure
deliveries after their arrival. Before you log items into your system is a prime time for them
to get lost or stolen. Dispose of any additional packing materials, so thieves do not get the
idea that a delivery just took place. If possible, install closed-circuit television (CCTV), also
called video surveillance, in your parking lots and other vulnerable locations to de ect
potential theft.
Chat
An outside threat isn’t the only security concern you should have. Sta can steal, too. Train
your team on the security systems in place and policies that address theft and its
discipline. Many people are unaware of the toll theft takes on a business, including the
costs of sta turnover and job security. So, train your sta to understand the true e ects of
stealing.
By se ing up procedures that prevent theft, you can stave it o before it occurs. For
example, sta who oversee stock should not also monitor the company’s nancial records.
Restrict
Company access areas/ to
(/portal/aboutus.shtml) personnel,
Educational and distribute responsibility. Consider whether all sta
require access to every portion of your warehouse or every supply cupboard. Assign sta
responsible for auditing to assist other sta with their supply needs. Regularly reassign
sta to stock control to prevent collusion. Finally, consider if you’re using the functions in
existing software to their best ability. The National Retail Federation nds that internal theft
is down a minimum of 11% in businesses that use inventory management software
(h ps://nrf.com/research/member-submi ed/inventory-management-retailers-how-set-
manage-and-optimize-winning).
NetSuite Can Help Provide Visibility Into Your Inventory Control

Process
Properly managing inventory can make or break a business, and having insight into your
stock at any given moment is critical to success. Regardless of the type of inventory
control process you choose, decision-makers know they need the right tools in place so
they can manage their inventory e ectively. NetSuite o ers a suite of native tools for
tracking inventory in multiple locations, determining reorder points and managing safety
stock and cycle counts. Find the right balance between demand and supply across your
entire organization with the demand planning and distribution requirements planning
features.
Learn more about how you can use NetSuite to manage inventory
(/portal/products/erp/warehouse-ful llment/inventory-management.shtml)
automatically, reduce handling costs and increase cash ow.
Chat

Accounting Software Cloud/SaaS

System encompassing multiple functional Your on-demand shared pool of computing
systems with one database. resources.
(/portal/resource/business-solutions- (/portal/resource/business-solutions-
articles/accounting-software.shtml) articles/cloud-saas.shtml)
Commerce CRM
In uence a buyer's decision making process Synchronize sales, marketing, customer
through social. service and technical support activities.
(/portal/resource/business-solutions- (/portal/resource/business-solutions-
articles/commerce.shtml) articles/crm.shtml)
Chat

ERP/Back O ce Inventory Management

Manage all the assets and resources of a Fundamentals of all inventory aspects and
company. how best to maintain life system.
(/portal/resource/business-solutions-articles/erp- (/portal/resource/business-solutions-
back-o ce.shtml) articles/inventory-management.shtml)
PSA
Integrate accounting systems for greater
visibility.
(/portal/resource/business-solutions-
articles/psa.shtml)
Educational Resources
Business Solutions Glossary of Terms (/portal/resource/glossary.shtml) Chat
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What are the main components of inventory control?

What are the main components of inventory control?

What are some potential issues that effective inventory control can help address?

What are some potential issues that effective inventory control can help address?

(/portal/home.shtml?

noredirect=T)  Call (tel:1-877-638-7848)

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Essential Guide to Inventory Control

Everything You Need to Get Started and Become More E cient

Included on this page:

Inventory control method comparisons

Successful inventory control requires data from purchases, reorders, shipping,

Inventory management is a higher-level term that encompasses the complete process of

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

How Inventory Control Can Improve Your Business

According to David Pyke, co-author of Inventory and Production Management in Supply

Tips and Expert Advice for Ge ing Started With Inventory

Actionable Advice From an Inventory Management Expert

How to Control Your Inventory

Advanced Software: Designed for tracking inventory, most of these targeted

Types of Inventory Control Systems

The Periodic System vs. the Perpetual System

The Periodic Inventory System

The Perpetual Inventory System

Other bene ts of barcoding include:

The elimination of manual data errors

Implementing barcodes on inventory is a smart idea because they o er scalability and

Radio Frequency Identi cation (RFID)

Although security is the primary bene t of RFID, other features include:

Some challenges with using RFIDs include:

Passive RFID tags require scanners or handheld readers.

The Correlation Between DIO and Warehouse Space

Inventory control best practices include:

Choose a Management Improvement Methodology: Management improvement

Management Methodologies Used in Inventory Control

Lean Manufacturing: Lean manufacturing is a high-level management philosophy

Methods to Replenish Stock

Stocking Methods Compared

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Control Stock With How You Sell It

Methods to Sell or Store Stock Compared

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Forecasting for Inventory Control

What ROP Means

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Using this information, she can calculate the ROP:

Follow this handy chart to calculate your ROP:

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

What EOQ Means

What EOQ Means

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Follow this handy chart to calculate your EOQ:

Supply Chain Inventory Control

Stocking Methods Along the Supply Chain Compared

Company (/portal/aboutus.shtml) / Educational Resources (/portal/resource/overview.shtml)

Stock Quantities: How Much to Keep

For raw stock, look at the following factors:

The reliability of the supplier and alternate sources of supply