For generations many business owners thought of inventory as source and demand. While this might have been true back many years ago, there are other things to consider, like inventory readily available and days’ supply of inventory. Having too much or inadequate inventory and even outdated inventory can eat up your money fast. Before you base your inventory on supply and demand, let’s take a look at how inventory control should work. No business owner wants to have too much inventory or inadequate.
But where is the happy medium and one that won’t hurt your pocketbook? Some business owners use the technological approach to time’s supply inventory, per calendar year or the number of times you order inventory, the entire year will equal your days’ supply of inventory divided by the number of days in.
No retailer should ever be more than a thirty-days way to obtain inventory employing this calculation. Not all small business owners can determine this calculation, particularly if it’s a new business. Develop a purchasing plan – If you are in the retail business and expect to sell so many units monthly, calculate how much those units can cost you per month.
10,000 well worth of inventory? The answer is no. You should have at least a 30 days over way to obtain inventory so it’s easier to order more than you will need if you don’t be in the food business. Food businesses need to regulate how the restaurant business works regarding food on hand … Read more...