| Having a problem managing inventory? Unable to keep | | | | called Quantity Available. |
| track of the goods you are purchasing and thereafter | | | | Now, you will still be selling until the fresh stock arrives, |
| selling? Don't know when to order items, or unable to | | | | so subtract the Lead Time Sales from the Quantity |
| keep your stock secure? Here are a few tips to help | | | | Available. If this amount is less than the minimum |
| you. | | | | stocking level (Time Lead Sales minus the Safety |
| 1. Keep track: This is the most important task in order | | | | Quantity), it implies that you have to reorder. This final |
| to manage your inventory. You need to keep records | | | | amount is termed as Quantity Available. |
| in a systematic manner. If you do not have an account | | | | How do you know how much to order? |
| of your sales volume, as well as your current stock | | | | Subtract the Quantity Available from the minimum |
| level, you will never know when and how much to | | | | stock level. |
| reorder. It is recommended that you keep an ordering | | | | Take a note of few terms related to stocking: |
| period, that is, a time frame after which you will make | | | | Safety Quantity: Average Sales is subtracted |
| your next order. Your tracking should be based on this | | | | from Maximum Sales. This quantity is the minimum |
| unit of time. You can track each item in the following | | | | quantity of items that you have when there is more |
| manner: | | | | sales than the usual amount. |
| Average Sales: How many articles do you think | | | | Time Lead Sales: The Average Sales multiplied by |
| you will sell during a particular time frame (ordering | | | | the Order Lead Time. |
| period)? | | | | 3. Quantity on Hand: It is always recommended that |
| Maximum Sales: What is the maximum quantity | | | | you physically check your inventory just to ensure that |
| that you think you will sell? | | | | the data in your software matches up to what is really |
| Bulk Order Quantity: How many articles do you | | | | there. This allows you to make adjustments in the |
| need to order in bulk at one time? | | | | case of unexpected losses, which can happen owing |
| Order Lead Time: From the day you have placed | | | | to theft or breakage. If these losses are not |
| the order, what is the time taken to receive the | | | | accounted for, keeping track using your software will |
| shipment? | | | | be futile. |
| Quantity On Hand: How many articles do you | | | | Note that if your ordering period is long, you need to |
| presently have in stock? | | | | have enough inventory in stock. However, be sure that |
| Quantity On Order: How many articles have you | | | | there is not too much inventory for fear of the |
| presently ordered for? | | | | products perishing or crossing their expiration date. |
| The above data can be stored on an Excel sheet and | | | | Besides, you will be investing more capital and covering |
| constantly updated. So, instead of clearing up items | | | | insurance and management costs. |
| that you now consider as junk, it is better to be | | | | 4. Sell Junk: One way to get rid of inventory that you |
| organized. | | | | feel is junk is to sell it to a vendor. You will not only be |
| 2. When to Order: Once you are aware of how many | | | | clearing out unwanted stock, but you will also not |
| items you have in stock, and which items are running | | | | suffer a complete loss. |
| out, you need to know when to make a reorder. First, | | | | 5. First In, First Out: If you are selling products that have |
| decide on the ordering period, that is, after how long | | | | an expiration date, it is recommended that you clear |
| you will make a reorder. It could be weekly, monthly, or | | | | the older stock first. In other words, put the items that |
| bi-monthly. You should ensure that you maintain a | | | | have a later expiration date behind the ones that will |
| minimum stock level at the end of the present ordering | | | | expire shortly. |
| period, which is enough to carry you through till the | | | | 6. Security: Ensure to keep your inventory safe from |
| next ordering period. | | | | staff members as well as outside intruders. Stock that |
| How do you know it is time to reorder? | | | | is more valuable than others need extra security and |
| Add the quantity of items that you already have | | | | should be delivered to a safe place. Make sure that |
| (Quantity on Hand) to the amount that you have | | | | your staff is trained to look out for thieves, who usually |
| ordered for (Quantity on Order), which is temporarily | | | | work in groups. |