A Guide to Inventory Cost Management to Boost Your Profits
Inventory costs are the expenses incurred in holding or storing goods for sale. It includes costs such as purchasing, storage, handling, insurance, and obsolescence. Companies strive to maintain a sufficient level of inventory to meet customer demand while keeping inventory costs low in order to increase profitability. Inventory cost is one of the most important […]
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Stockouts – Out of Stock : What Is It, Causes, Impacts, and How to Avoid?
Stockout or out-of-stock means a store has sold all of its stock of a specific item and is unable to restock it immediately to meet customer demand. Businesses should effectively manage its inventory levels and balance between supply and demand to avoid stockout. Because of stockout, you lose sales, customers, money, profits, and brand reputation. CGP […]
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ABC Analysis – Classification of Inventory
ABC analysis is a method used in inventory management to categorize stock items into three classes based on their relative importance. This helps organizations prioritize their efforts to manage inventory and reduce costs. Class A items are the most important and valuable items in the inventory, representing a small percentage of the total inventory but […]
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Maximizing Efficiency: Understanding the Economic Order Quantity Model
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 […]
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Inventory Management – Definition, Importance, Operations, & Best Practices
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 […]
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Inventory Replenishment: The Complete Guide for Restocking
Inventory replenishment refers to the process of restocking and maintaining an optimal level of inventory in a business. In the retail business, worldwide losses due to out-of-stocks amount to $634.1 billion. According to another statistic, CGP Retailers Lost Out On 7.4% in Sales to Stock-Outs in 2021 which equates to $82 billion in missed revenue. […]
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Excess Inventory: Eliminate Excess Stock and Boost Profits
Excess inventory, also known as overstock or surplus inventory, refers to the stock of goods that a business holds in excess of what it needs to meet immediate demand. It’s essentially the products sitting on shelves, in warehouses, or in manufacturing facilities that haven’t been sold and are unlikely to be sold in the near […]
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Inventory Accounting: A Comprehensive Guide
Inventory accounting plays a crucial role in accurately valuing and managing a company’s inventory assets. It involves assigning costs to inventory and properly documenting it in financial records. This comprehensive guide will provide you with a deep understanding of inventory accounting, its methods, and its impact on profit and taxation. We’ll explore the different types […]
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Purchasing Management: Strategies for Effective Supply Chain Management
Purchasing Management is the process of acquiring goods and services from external suppliers in a cost-effective and efficient manner. It is responsible for ensuring that the organization has the right goods and services at the right place at the right time for the right price. Purchasing Management supports the organization’s overall business strategy by helping […]
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Order Fulfillment- Steps, Challenges & How to Overcome
Order fulfillment refers to the process of receiving, processing, and delivering a customer’s order. It encompasses a variety of activities, including inventory management, picking and packing of products, shipping and transportation, and customer service. The goal of order fulfillment is to ensure that the customer receives their order in a timely, accurate, and cost-effective manner. […]
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