Inventory Management Week 3

Objectives Members: Reference

Lesson 1.1: Inventory Management ● Anabel Celesios Intuit Quickbooks. (2021). What is
Lesson 1.2: Importance of Inventory ● Eula Mae Canete inventory management? Retrieved on
Management ● Jamaicah Apal September 10, 2022 from
Lesson 1.3: Inventory Management ● Jimavel Naniilit https://www.tradegecko.com/invent
Terms ● Juliemae Dalo ory-management
● Marinel Manongas
● Reymart Quiros

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Inventory Management
- a systematic approach to sourcing, storing, and selling inventory—both raw materials
(components) and finished goods (products).
- In business terms, inventory management means the right stock, at the right levels, in the
right place, at the right time, and at the right cost as well as price.
- As a part of your supply chain, inventory management includes aspects such as controlling
and overseeing purchases — from suppliers as well as customers — maintaining the
storage of stock, controlling the amount of product for sale, and order fulfillment.
- Small-to-medium businesses (SMBs) often use Excel, Google Sheets, or other manual tools
to keep track of inventory databases and make decisions about ordering.
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Inventory Functionality and Definitions.

1. Inventory management involve risk which varies depending upon a firm’s position in the
distribution channel. The typical dimensions of inventory risk relate to time duration, depth,
and breadth of commitment.
2. For a manufacturer, inventory risk is long-term.
3. A wholesaler purchase large quantities from manufacturers and sell smaller quantities to
retailers.
4. For a retailer, inventory management is about the velocity of buying and selling.

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“However, knowing when to reorder, how much to order,

where to store stock, and so on can quickly become a
complicated process. As a result, many growing businesses
graduate to an inventory management app, software, or
system with capabilities beyond manual databases and
formulas.”

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Inventory Functionality.
• Geographical Specialization – Allows geographical positioning across multiple manufacturing
and distributive units of an enterprise.
• Decoupling – Allows economy of scale within a single facility and permits each process to
operate at maximum efficiency rather than having the speed of the entire process constrained by
the slowest.
• Supply/Demand Balancing – Accommodates elapsed time between inventory availability
(manufacturing, growing, or extraction) and consumption.
• Buffering Uncertainty – Accommodates uncertainty related to demand in excess of forecast or
unexpected delays in order receipt and order processing in delivery and is typically referred to
as safety stock.
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Importance of Inventory Management.

Clear visibility helps you: In a broader context, inventory management
● Reduce costs also provides insights into your financial
● Optimize fulfillment standing, customer behaviors and
● Provide better customer service preferences, product and business
● Prevent loss from theft, spoilage, and opportunities, future trends, and more.
returns

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Inventory Management Terms

1. Barcode Scanner

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2. Bundles

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3. Cost of Goods Sold (COGS)

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4. Deadstock

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5. Decoupling Inventory

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6. Economic Order Quantity (EOQ)

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7. Holding Costs

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8.Landed Costs

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9. Lead Time

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10. Order Fulfillment

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11. Order Management

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12. Purchase Order

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13. Pipeline Inventory

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14. Reorder Point

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15. Safety Stock

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16. Sales Order

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17. Stock Keeping Unit (SKU)

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18. Third-Party Logistics (3PL)

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19. Variant

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