Retail Inventory Management

Inventory management refers to the process of ordering, storing and using a company's inventory. This includes the management of raw materials, components and finished products, as well as warehousing and processing such items.

Inventory management is important for companies with physical goods where the cost of carrying inventory can be a large expense. Theses companies must constantly balance the risks of inventory gluts and shortages.

Just-in-time (JIT) and materials requirement planning (MRP) help companies more effectively manage the cost of carrying inventory.

The first step in any inventory process is identifying the items that will be kept in stock and getting an accurate count of what is currently on hand.

There are four main inventory methods:

1. Just-In-Time (JIT),
2. Materials Requirement Planning (MRP)
3. Economic Order Quantity (EOQ)
4. Days Sales of Inventory (DSI)

The top five functions of an inventory management system are:

1. Avoid Stock-outs and Over-stock
2. Quality & Spoilage Management
3. Inventory Reporting
4. Cost Management
5. Balance Supply & Demand

Cycle count is a perpetual inventory auditing procedure involving a repeated sequence of checks on a subset of inventory.