Three Types of Inventory Planning Models

Three Types of Inventory Planning Models

Someone once said everything is best in moderation. This couldn’t be any truer for handling inventory. Having either too much or too little can affect sales and profitability. That’s where inventory planning comes into play. In essence, a company needs to be able to analyze the demand and decide how much and when to order more. There are three popular models for companies to choose from. Continuous Inventory Systems This system keeps a constant track of quantities. Once they get below a predetermined level, managers order more. This quantity is decided on so inventory costs are kept low. The advantages of this inventory planning model include knowing stock in real-time, easy stock tracking, direct manager control and ease of seeing if something is in stock. The...

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