A reorder point (ROP) is the minimum inventory level that triggers a replenishment order for a specific item. In essence, it’s a signal that says, “It’s time to restock!“ Reorder Point helps maintain optimal inventory levels. It is crucial as it avoids stockouts, optimizes inventory levels to reduce costs and spoilage, and improves cash flow […]| Cash Flow Inventory
Lead time is the time needed to complete a process from start to finish. It may be used for various types of operations, including purchase (from the order date to receipt of goods), sales (from the order date to the delivery date), production (from the production order date to the finished goods), project management (starting […]| Cash Flow Inventory
Inventory optimization is the strategic process of managing stock levels to meet customer demand while minimizing costs and maximizing profitability. It involves balancing the right amount of inventory – not too much to incur high holding costs, and not too little to avoid stockouts. Effective inventory optimization relies on data analysis, forecasting, and efficient supply chain management to streamline […]| Cash Flow Inventory
Inventory management is the process of overseeing and controlling the movement of goods in a company, from the time they are ordered to the time they are sold. It involves managing the flow of products into and out of a company’s warehouse or storage facilities, ensuring that the right products are available in the right […]| Cash Flow Inventory
Economic Order Quantity (EOQ) is an inventory management method that determines the optimal quantity of items to order to minimize the total cost of ordering and holding inventory. It balances the cost of ordering inventory, such as purchasing and processing costs, with the cost of carrying inventory, such as storage and capital opportunity cost. Organizations commonly […]| Cash Flow Inventory
Overstocking refers to having more inventory than necessary to meet customer demand. Overstocking ties up cash and increases costs for both operations management and holding rents. As a result, your profitability is reduced. Overstock is also referred to as excess stock, excess inventory, stock surplus, or surplus inventory. Understocking means that you do not have […]| Cash Flow Inventory
