Inventory Management: Is It Time to Reorder?
Maintaining the optimal inventory level is a delicate balance. Too little inventory and you risk stock-outs and missed deadlines. Too much and you risk obsolescence and unnecessary storage fees. The good news is, there are mathematical formulas to help you. The bad news is, you’re going to need some historical data and a calculator.
Experts call the inventory level at which you need to place a new order the “reorder point.” Here’s the basic formula.
The problem is, if you don’t reorder until you hit that number and something goes wrong, you might end up short until your shipment comes in. So, most people factor in “safety stock,” which is product you keep in case there’s an emergency.
Many of you are probably saying, “Ummm…How do I know how much safety stock to keep?” More good news…there’s a formula for that.
Some people even find the Economic Order Quantity (EOQ) so they know the exact order quantity that makes the best use of their money. And guess what…there’s also a formula for that.
When you’re done with all that math, I have a better idea. Why not let the inventory management experts at Curtis 1000 “uncomplicate” it for you? We make these calculations for our customers every day, and we have automatic reorder notifications too. Call us at 877.287.8715 or fill out the “How Can We Help You?” form on our website today!