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Evidence Inventory

The document is a student paper about inventory management. It defines inventory management as tracking inventory from purchase to sale to ensure there is enough stock to fill orders. It discusses why inventory management is important to limit risks of stockouts. The benefits are being able to fill orders to raise profits while saving money by keeping less stock and improving cash flow. Effective inventory management requires tracking inventory location and amounts to have the right products in the right place at the right time.

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Alejandra Nuñez Muñoz
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66 views

Evidence Inventory

The document is a student paper about inventory management. It defines inventory management as tracking inventory from purchase to sale to ensure there is enough stock to fill orders. It discusses why inventory management is important to limit risks of stockouts. The benefits are being able to fill orders to raise profits while saving money by keeping less stock and improving cash flow. Effective inventory management requires tracking inventory location and amounts to have the right products in the right place at the right time.

Uploaded by

Alejandra Nuñez Muñoz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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UNIVERSIDAD TECNOLOGICA EL RETOÑO

SUPPLY CHAIN I

“INVENTORY MANAGMENT AND HOW DOES IT WORK”

LINM 10A ID: 2432

STUDENT: Fatima Andrea Gonzalez Rivera


TEACHER: Iliana Rodríguez

March/10th/2023
INVENTORY MANAGMENT

Inventory management helps companies identify which and how much stock to
order at what time. It tracks inventory from purchase to the sale of goods. The
practice identifies and responds to trends to ensure there’s always enough stock to
fulfill customer orders and proper warning of a shortage.

An inventory management process is about tracking and controlling your brand's


stock from the moment it's manufactured until it reaches customers. This includes
procuring, storing, moving, processing and selling inventory.

WHY IS INVENTORY MANAGEMENT IMPORTANT?

Inventory management is vital to a company’s health because it helps make sure


there is rarely too much or too little stock on hand, limiting the risk of stockouts and
inaccurate records.

BENEFITS OF INVENTORY MANAGEMENT

The two main benefits of inventory management are that it ensures you’re able to
fulfill incoming or open orders and raises profits. Inventory management also:

Saves Money:
Understanding stock trends means you see how much of and where you have
something in stock so you’re better able to use the stock you have.
This also allows you to keep less stock at each location (store, warehouse), as
you’re able to pull from anywhere to fulfill orders all of this decreases costs tied up
in inventory and decreases the amount of stock that goes unsold before it’s
obsolete.
Improves Cash Flow:
With proper inventory management, you spend money on inventory that sells, so
cash is always moving through the business.
Satisfies Customers:
One element of developing loyal customers is ensuring they receive the items they
want without waiting.
Inventory is the goods or materials a business intends to sell to customers for
profit. Inventory management, a critical element of the supply chain, is the tracking
of inventory from manufacturers to warehouses and from these facilities to a point
of sale.

The goal of inventory management is to have the right products in the right place at
the right time. This requires inventory visibility - knowing when to order, how much
to order and where to store stock. The basic steps of inventory management
include:

 Purchasing inventory: Ready-to-sell goods are purchased and delivered to


the warehouse or directly to the point of sale.
 Storing inventory: Inventory is stored until needed. Goods or materials are
transferred across your fulfillment network until ready for shipment.
 Profiting from inventory: The amount of product for sale is controlled.
Finished goods are pulled to fulfill orders. Products are shipped to
customers.

WHAT ARE THE TYPES OF INVENTORY MANAGEMENT?

- Periodic inventory management:

The periodic inventory system is a method of inventory valuation for financial


reporting purposes in which a physical count of the inventory is performed at
specific intervals.

- Barcode inventory management:

Businesses use barcode inventory management systems to assign a number to


each product they sell.

- RFID inventory management:

RFID or radio frequency identification is a system that wirelessly transmits the


identity of a product in the form of a unique serial number to track items and
provide detailed product information.
KEY FEATURES OF EFFECTIVE INVENTORY MANAGEMENT

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