Inventory management business is the stock management that takes place in a firm. It primarily means knowing what goods you have stored in what numbers. Inventory business management includes checking the time in between stock deliveries, seeing when the stock is low, needs to be reordered, costs of delivery, forecasting future needs, stock valuation, returning damaged goods etc. It also involves a seller who needs to maintain merchandise assortment during buying, selling and delivery times. Managing the inventory is necessary for minimizing business costs. Having surplus stock available wastes precious space and heightens cost. Identifying and controlling stock levels enables a business to operate smoothly and keep storage costs in checks.
Managing stocks and inventory is not a new phenomenon in the business world. In the old days shopkeepers used to write down orders and purchases to keep track of their stocks and anticipate future requirements. In spite of all the skill and intuition of a seller the method was hardly accurate. The Industrial Revolution shifted business focus to skill and efficiency. The modern checking out system used for inventory management was developed in Harvard during the 1930s, however at the time it proved to be too expensive to use. The forerunner of the barcode system was developed in the 1940s it used to ultraviolet light sensitive ink and a reading device to mark sale items. As computers and technology have become more readily available inventory management business systems have evolved. One of the most popular methods used along with bar-coding is vendor managed inventory. In this method the vendor is made aware of their product leaving the shelf of a retail store via computers, at the end of the given time period the vendor knows what sales have taken place and is in charge of sending the new stock over to the retail outlet.
For inventory management, businesses firstly need to learn what products customers want to buy and what quantity satisfies their needs. Having fewer stocks causes delays and gives the firm a bad image while having excess stocks increases business stocks. A business should analyze consumer needs by market research, learn from the sales of past years, take hints from the economy about how purchasing power will be affected and then analyze how that will influence consumer wants. The right quantities of the product should be bought for this knowing what to order, how much to order, when to order, and when to expect the products to arrive is necessary.
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For this having a computerized inventory management system is the best. These systems minimize the time required to manage stocks. Newer methods for inventory management business systems include point of sale terminals which automatically update stock levels. Barcodes and barcode readers allow stock management to be done quickly, and electronic supply catalogs lets stock details be updated quickly over the internet. Reports from these systems allow one to manage stock quickly and efficiently, manually only the things left to be done are identifying which products are not selling and making sure that system is accurate against physical checks.