Inventory management is a strategic practice that involves overseeing, organizing, and optimizing an organization’s stock of goods and materials. It encompasses a set of processes and techniques aimed at ensuring a balanced and efficient inventory level to meet customer demands while minimizing costs. At its core, inventory management entails accurate tracking of inventory levels, which includes both raw materials and finished products. By understanding stock quantities and patterns, businesses can avoid stockouts or overstock situations.
Demand forecasting plays a pivotal role in inventory management. Analyzing historical sales data and market trends enables businesses to anticipate customer demand accurately, allowing for proactive stock replenishment. Strategic inventory planning involves classifying items based on their value, turnover rate, and criticality. This aids in determining the appropriate replenishment frequency and storage conditions for different items.