Inventory Management

Written by Patricia Skinner
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According to the principles of good inventory management, managers and administrators should be able to pinpoint every item of their inventory at any given time. Failure to be able to do this can cause confusion, chaos and is a threat to security. This is no exaggeration. If managers are not keeping accurate track of inventory, someone is bound to try to take advantage of that oversight.

What is inventory? Literally it is the goods that any company deals in. The amount of inventory you have on your shelves can be called money, because that is what it will translate into once it is sold. Good inventory management not only helps you to keep track of your investment, it also helps you to maximize your investment in several different ways.

Give Customers What They Want

A maxim that business owners are all familiar with is "the customer is always right." The corollary of this is that the customer should always be able to get what he or she wants from you. In addition to off the shelf goods, many businesses also have to keep an inventory of spare parts for the goods that they sell. Knowing how many parts are needed in a particular time period, and of what type, can allow you to build a more satisfied customer base.

It is also a great way of making the best use of the shelf space you have. No business has unlimited storage facilities. Knowing exactly what your customers are going to need will mean that your space is taken up only with goods that are going to be highly profitable to you. These considerations are actually only the tip of the iceberg regarding the benefits of effective inventory management. Even a very brief study of the subject should be enough to convince any business manager that business success depends in no small way on the quality of inventory management.

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