Category — Inventory Management

Inventory management is a risky business. Too much product on hand increases carrying costs. Too little reduces customer satisfaction. Finding the perfect balance between the two is near impossible.

The best managers know that they are in the risk management business and use every available tool to minimize their exposure. One key component is the cost of backorders. Knowing how much being out of stock costs your company helps refine the order decision.

There are both short-term and long-term costs associated with backorders. The short-term are the processing costs for multiple shipments to customers and receipts from vendors.

The long-term costs should keep you awake at night.

Being out of stock costs you customers. [Read more →]

Summer is officially over. Holiday is just around the corner. Are you ready to make your dreams come true? Or, are you hunkering down, waiting to see what happens?

A great holiday season (translation: profitable) is yours if you take the following steps:

Energize your marketing. People are tired. They are tired of the recession, health care debates, wacky weather, and the same ol’ stuff. They want to have some fun. Money may still be tight, but [Read more →]

Inventory management is simple if you are a psychic. All you have to do is gaze into your crystal ball to see which items are hot and which ones are not. If you know how to do this, then move on along. There is nothing for you here. But, if it seems that your profits are continually falling into the inventory money pit, let’s fix it.

Good inventory management programs find the right balance for your company. Too much stock on hand increases carrying costs, shrinkage, and liquidation. Too little increases fulfillment costs, cancellations, and returns. [Read more →]