Inventory Management In A Warehouse

Inventory or stock is the collection of all materials and goods that are stored in a warehouse, whether to complete the manufacturing process or for sale to the customer. Stock management is very important since having stock avoids shortages in the product and having product availability enables the ability to meet customer demand.

Types of Stock or Inventory

There are difference types of stock as highlighted below:

Safety Stock: This is the stock to meet unexpected demand or demand in exceptional circumstances. (e.g. unexpected delays)

Seasonal Stock:  This is for products with sales that increase during certain times of the year.

Recovery Stock: This is for products that can be used partially or totally.

Perishable Stock: This is for products that have an expiry date.

Speculative Stock: If it is expected that the sales for a particular product will be increase in the short term, then the stock for that product is increased before there is an increase in the product demand.

Types of Stock From The Operational Perspective

Stock can be classified based on the operational perspective as below:

Optimal Stock: This is the level of stock that offers maximum profitability.

Zero Stock: This is the amount of stock that it associated with the Just In Time (JIT) management which minimizes the amount of inventory at the warehouse. 

Physical Stock: This is the amount of stock that is available at any moment in the warehouse. 

Net Stock: This is the result of subtracting unmet demand from existing stock in the warehouse. 

Available Stock: This is the result of adding the physical stock in the warehouse and the orders in progress to suppliers less the unmet demand.

Stock Management Variables

Below is a list of variables that affect the stock management in the warehouse:

  • The sales forecast.
  • Planning and management of purchases.
  • The desired quality of the service.
  • The product storage system. Optimizing the space in the warehouse plays a key role.
  • Supplier delivery times.

Ayoubi steel can assist you in finding the right storage system solution for our warehouse. Contact us today for a free quotation on sales@ayoubi.com