Discover published sets by community

JIT inventory system minimizes holding costs by having stock arrive as close as possible to when it's actually needed for sale. It enhances cash flow and reduces waste. - Methods include close collaboration with suppliers, real-time inventory tracking, and demand forecasting.

Cross-docking is a practice in logistics of unloading materials from incoming trucks and loading them directly onto outbound trucks with little or no storage in between. This can improve turnover rates and reduce storage costs.

Consignment inventory involves supplier-owned stock kept at the retailer's premises. Payment is only made when the item sells. - Importance: Reduces risk and up-front costs for the retailer, but can complicate inventory tracking.

Cycle counting is a method of inventory auditing where a small subset of inventory is counted on a specified day. - Importance: Allows for continuous verification of inventory accuracy and can identify issues promptly.

Dead stock refers to items that can no longer be sold. Managing it involves strategies to prevent inventory obsolescence, such as clearance sales or donations. - Importance: Dead stock ties up capital and storage space, reducing overall inventory efficiency.

RFID in inventory management enhances product tracking accuracy and improves stock visibility across the supply chain. - Importance: It speeds up inventory audits and reduces discrepancies.

Demand forecasting helps predict consumer demand to optimize inventory levels. It's key for maintaining the right amount of stock without over or under stock situations. - Methods: Use historical sales data, market trends, and statistical algorithms.

Supplier Lead Time is the time taken by suppliers to deliver goods after an order is placed. Shorter lead times can help reduce the amount of stock on hand. - Importance: It affects reorder points and inventory turnover.

Bulk shipments can reduce transportation costs and simplify handling but require careful management of stock and storage space. - Importantly, it's critical to ensure demand is sufficient to warrant large shipments to avoid excessive carrying costs.

Markdown management is the strategic reduction in the price of goods to increase sales of slow-moving or excess inventory and minimize losses. - Importance: It helps to free up space for new inventory and recover sunk costs.

ABC Analysis helps prioritize inventory management efforts by categorizing items based on their impact on overall inventory cost, ensuring focus on the most financially significant items. - Methods: Categorize stock into A, B, and C groups based on consumption value.

Ageing analysis identifies the time items have been in inventory, helping to manage and clear out old stock. - Importance: Prevents accumulation of obsolete items and optimizes the saleability of inventory.

OTB is a financial budget for merchandise purchases over a certain period. It helps retailers avoid overbuying or underbuying by aligning purchases with sales forecasts and current inventory levels.

EOQ is a formula used to determine the optimal order quantity that minimizes the total holding costs and ordering costs. - Formula: $EOQ = \sqrt{(2DS) / H}$ where D is annual demand, S is order cost, and H is holding cost per unit per year.

The Reorder Point is the inventory level at which an order should be placed to replenish stock before it runs out. - Formula: Reorder Point = (Average Daily Usage Rate * Lead Time) + Safety Stock.

A perpetual inventory system keeps a real-time record of inventory levels, updating instantly as sales and restocks occur. - Importance: Provides a highly accurate inventory count that supports better decision-making.

Safety Stock acts as a buffer against demand variability and supply chain disruptions. - Importance: Helps prevent stockouts. - Formula: Safety Stock = (Maximum daily usage rate x Maximum lead time in days) - (Average daily usage rate x Average lead time in days).

Shrinkage is the reduction in inventory due to shoplifting, employee theft, or errors. It's critical to measure and manage shrinkage to prevent loss of profit. - Strategies include regular audits, security systems, and employee training.

VMI is where the supplier takes responsibility for managing inventory levels at the customer's premises. - Importance: It can lead to better stock availability and lower inventory holding costs.

Inventory Turn Days indicates the number of days it takes to sell the average inventory on hand. - Formula: Inventory Turn Days = 365 / Inventory Turnover.

Multi-echelon optimization involves managing inventory across different stages of the supply chain to minimize system-wide costs. - Strategies include integrated planning, centralized decision-making, and advanced forecasting techniques.

Stock Turnover is crucial for maintaining a balance between having enough stock to meet demand and minimizing excess that can lead to markdowns. Higher turnover generally indicates higher sales efficiency. - Formula: Stock Turnover Ratio = Cost of Goods Sold / Average Inventory.

Seasonal Inventory refers to products that are only sold during certain seasons. Managing it involves precise timing and accurate demand forecasting to avoid overstocking or stockouts. - Strategies: Pre-season planning, clearance sales, and off-season storage.

SKU Management involves tracking and managing the variety of stock keeping units within inventory to ensure the right products are available at the right time. - Strategies include data analysis, SKU rationalization, and inventory auditing.