1. What is inventory?
- It includes raw materials, Work-in progress, and finished goods, and maintenance and
repair tools.
2. What is inventory control? [SMM] (supervising, monitoring, and managing)
- Inventory control is the process of supervising, monitoring, and managing the flow of
goods in and out of a business. This is to avoid overstocking, prevent stockouts, to
maintain accurate inventory records and to control holding costs.
It means keeping track of what’s in stock, what is running out, and what should not run
out.
3. What are the reasons why inventory control matters? [i][r][p][i.c][i.h]
Companies that have well managed inventory can have these benefits:
(1) It can improve operational performance by 20-30%
(2) Reduces unnecessary costs
(3) Prevents waste and spoilage
(4) Improves customer satisfaction
(5) It helps businesses plan better
An example scenario would be that poorly managed inventory controls can lead to stockouts,
stockouts can lead to panic in the market as people will panic buying due to FOMO.
4. What are 5 key objectives of inventory control? [slo][Lpdc][rt][rh][fbr]
(1) Stock level optimization -
- Too much inventory = more storage costs
- Too little inventory = loss sales (opportunity loss)
Automated demand forecasting + warehouse control systems
(2) Loss prevention and damage control - monitors theft, spoilage, and
obsolescence
(3) Real-Time Tracking - offers visibility to different warehouses and sales
platforms, which is critical for efficiency [RFID TECHNOLOGY]
(4) Reducing Holding Costs -
Holding costs:
1) Storage space, insurance, staff, utilities, and risk.
(5) Forecast-based reordering - Quantitatively predicts when is the reorder stock
using sales data, seasonal trends, and purchase history.
5. What are 5 inventory control techniques? [j][e][r][a][f]
(1) Just-In-Time (JIT) - products are ordered only when needed.
(a) Cuts waste and storage costs
(2) Economic Order Quantity (EOQ) - calculates the optimal order quantity which
minimizes total costs
(3) Reorder point system - sets a threshold to automatically trigger reorders
(4) ABC Analysis - sorts inventory by importances
1) High value, low volume -> laptop, vehicles, equipment
2) Mid-value, mid volume →
3) Low-value, high volume → pens
(5) FIFO vs. LIFO
1) FIFO - First in, first out
2) LIFO - last in, last out
INVENTORY CONTROL SOFTWARE:
1) Stock tracking and forecasting
a) Net suite oracle
b) Zoho
c) Fishbowl
d) Tradegecko
e) SAP business one
f) ODOO
These systems used barcodes, RFIDS, real time tracking, and cloud integration to
automate and streamline inventory control.
6. Differentiate inventory control from inventory management?
Inventory management is the broader process that includes planning, forecasting, and
procurement Inventory control Is a subset of inventory management focused specifically on
ensuring products are stored and tracked accurately.
[stored and tracked] [planning, forecasting, procurement]
Criteria Inventory Control Inventory Management
Focus Stock levels and movement Forecasting, procurement,
stock movement, and sales
Scope Day-to-day tracking End-to-end planning and
coordination
Objective Reduce loss, optimize space Meet demand, align with
business goals
Tools used Barcode scanners, real-time ERP systems, AI forecasts,
dashboards supply chain tools
Example Alert for low stock on a Planning Q1 Purchases
fast-selling item based on previous Q4 sales
SECTOR-SPECIFIC APPLICATIONS:
1. Retail:Walmart
2. Restaurants: McDonalds:
3. Healthcare: Mayo Clinic
4. E-Commerce: Flipkart
INVENTORY CONTROL METRICS: [ITR][SR][CC][OA]
1) Inventory turnover ratio - how often inventory is sold and replaced
2) Stockout rate - how frequently items run out
3) Carrying costs - cost of storing unsold goods
4) Order accuracy - number of orders fulfilled
Tracking these help informed decisions
WHAT HAPPENS WITHOUT INVENTORY CONTROL:
1) Overstock leads to markdowns or waste
2) Stockout - lost sales and customers
3) Inaccurate tracking - wrong financial data
4) Lost business, and unhappy customers
TIPS FOR BETTER INVENTORY CONTROL [DyS][CrA][Srl][TrS][AFd]
1) Digitize your system - use software instead of spreadsheets
2) Conduct regular audits - monthly or quarterly stock checks
3) Set reorder levels - avoid last-minute surprises
4) Train your staff - inventory control is a team effort
5) Automate Forecast demand - use historical data to prepare.
INVENTORY CONTROL → YOUR CAPITAL, YOUR BRAND REPUTATION AND YOUR
CUSTOMER PROMISE