| Retailers, do you know what a power of technology | | | | managerial judgment skills in order to preplan product |
| blended with your inventory management system | | | | availability. |
| could result in? You may think you know a lot about | | | | Backup Stock, commonly known as safety stock, is |
| their uses and how they may fit your needs but you | | | | used when the customer demands exceeds or |
| could be way behind on the current technology as | | | | forecasted demands exceeds or when there is delay |
| well. Let us see how inventory management reports | | | | in delivery of goods by vendor. It acts as lifesaver |
| can help you. | | | | during above mentioned situations. |
| An ideal inventory management report consist of | | | | Forecast gives many valuable insights to retailers. |
| information on basic stock list, inventory turnover, | | | | Sales forecast are straightforward in nature. There |
| product availability, back up stock, forecast, order | | | | are various forecasting techniques that are used to |
| point and order quantity. | | | | arrive at accurate forecast value. Based on these |
| Basic stock list is the list of SKUs (products) along | | | | forecasted values retailers can optimize the |
| with the description, its stock number, quantity of | | | | inventory. |
| items on hand and sales of last specified weeks. The | | | | Order point is a point of inventory stock below which |
| weeks may be for 4 weeks or 12 weeks or as per | | | | quantity available shouldn't go or the inventory would |
| the retailers needs. These basic information about | | | | be stock out before the next order arrives. Order |
| inventory helps to arrive at sales forecasts and order | | | | point equals lead time quantity plus the safety stock. |
| quantities. | | | | Lead time is the time gap between the next orders |
| Inventory Turnover is the ratio of turnover to | | | | needs to be placed and when it arrives at the retail |
| inventory. In other words it's the total amount of | | | | shop. |
| SKUs sold at a given time. The main concept behind | | | | Order Quantity, the planner should determine when |
| inventory turnover is to find the return of | | | | the quantity available is less than the order point. The |
| investment on each product i.e., how much amount | | | | planner should order in such a manner that the sales |
| can be generated from the amount invested on a | | | | do not dip into backup stock before the next order |
| SKU. The retailer must plan their turnover to achieve | | | | arrives. |
| reasonable profits. | | | | For an inventory management report, the retailer |
| Product Availability means the product availability | | | | must keep track their data and store them. From |
| status when the customers' demand for it. Retailer | | | | these stored data, required information is extracted |
| must maintain minimum amount of inventory as well | | | | and formatted to a report. The reports, hence, could |
| as not run out of stock. Retailer must have | | | | be used to make strategic decisions. |