Know how you can manage your business inventory effectively and in a simple manner

Know how you can manage your business inventory effectively and in a simple manner
November 03 00:52 2017 Print This Article

If you are planning to start your own business then many things are there that has to be considered before and one of them is inventory management. It is the most important thing and has to be planned very carefully and in a proper manner. But, most of the time companies do fail in managing inventory as they don’t have any idea. So, in such cases they can prefer taking help of professionals who know many ways through which inventory management can be made much simpler. Not only this, to get effective results and better response companies can also opt for inventory software that are easy to use and most importantly they need not require to have any special knowledge for using it. In fact, some of the simple inventory management software are closed based and can run on any device at anytime and anywhere.

Different techniques of inventory management

There are so many ways of doing business and inventory management is one of them. This process can even be customized as per the need and requirement of business. The main benefit that you will enjoy with stock management techniques is that it will reduce human errors and will provide accurate and updated result. Being an intrinsic part of any business, stock management is something that you should not mess up with. Mentioned below are some of the techniques using which stock can be managed easily without any problem plus it will also help in profit maximization and achieving better result.

ABC analysis: This is one of the most popular techniques of stock management and is based on Pareto principle. It divide on-hand inventory in three categories which is A, B and C. This category is divided on the basis of annual unit consumption, cost significance and inventory value. This process allows prioritization in terms of different inventory and goods where allocation of human resources and funds are deployed. Moreover, in this technique everything is managed individually and most importantly every category does not need proper attention.

Drop shipping: This method is very effective and it eliminates the cost of holding inventory together. In this you need to make drop shipping agreement using which you can directly contact with retailers and wholesalers and thus they will send goods directly to customers. The main benefit of using this technique is that you need not have to keep goods in stock and thus it will help in saving upfront cost of inventory plus you will also get positive result.

Inventory turnover ratio: It is the process in which calculation is done in order to know that how quickly inventory has used up in the given time period. The higher the ratio will be the higher will be sales volume and better profitability. Inventory turnover is something that should be watched continuously and closely on regular basis in warehouse. But, in order to get accurate result it is important to calculate everything in a proper manner.

 

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Nettie Gordon
Nettie Gordon

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