What is the inventory

The definition of inventory pertains to the stock of goods and materials that a company has available.

These goods are then used for resale, production, or consumption.

To have good inventory management, it is necessary to have a warehouse structure aimed at ensuring proper placement of stored goods.

Inventory Management

To have good inventory management, various techniques must be implemented, namely:

• Maintaining balance with lead time;
• Implementing inventory management costs;
• Managing resources efficiently;
• Forecasting what to have on hand in the inventory;
• Evaluating the effectiveness of the inventory;
• Giving visibility to inventory;
• Managing the quality of goods;
• Handling replenishment, returns, and defects of goods;
• Making accurate demand forecasting.

These measures will lead to maintaining an effective and optimal level of inventory that helps keep a proper assortment of goods available while also controlling orders, shipping, and costs. 

Investments in a company's stock represent an important part on the level of service provided to the customer.

In particular, when a company does not have adequate stocks, stockouts occur.

This means a consequent loss of customers and decrease in turnover.

The importance of inventory

Having an effective inventory is very important for several reasons:

• Time: if there is enough stock, the manufacturer does not have to order goods at the last moment and the consumer does not wait for delivery times;
• Seasonal demand: demand varies based on the period but the stocks are always those, therefore, there is an accumulation of stock in anticipation of future consumption;
• Uncertainty: basically, stocks are reserves aimed at satisfying uncertainties in demand;
• Value: some stocks gain the required value when they are stored for a certain time.

In conclusion, we can say that inventory is very important in achieving one's sales goals.