Glossary
Merchandise Planning
What is Merchandise Planning? Merchandise planning is an inventory management concept. Merchandise are goods which one aims to sell. Merchandise planning is to make available these goods at the right time, place, and quantity. It aims at meeting customer demand while maximizing the return on investment. It includes selecting, buying, and selling products that satisfy […]
Cost of Goods Sold
Cost: A critical term that determines the profitability of a business. Thus, one always aims to minimize the cost. For this, it is essential to understand various components of cost in a business. Cost of Goods Sold, or COGS is one such cost component. Let us understand it in detail. What is the Cost of […]
Inventory classification
Efficient inventory management is critical for the success of any business. A business aims to maintain an optimum inventory level that helps in timely meeting customer demand while minimizing costs. Excess inventory or stock-outs both harm the company. Excess inventory increases costs, while a shortage of inventory reduces sales. Both these affect the profit of […]
Inventory Turnover
A successful business has an efficient inventory management policy. It means that it timely meets customer demand while controlling costs. This helps in improving the profitability of the business. Inventory turnover is an indicator of the efficiency of inventory management. What is inventory turnover? Inventory turnover is a financial ratio. It indicates the number of […]
What is lean Warehouse Management? Definition and Examples – OrderCircle
Lean warehousing means managing a warehouse optimally. It aims at eliminating inefficient processes. This helps in maximizing returns and reducing costs. Lean warehousing aims at increasing productivity. This is done by eliminating wastage (Muda), overburden (Muri), and irregularity (Mura). These three Japanese words form the basis of lean warehousing. The concept of Lean management has emerged […]
Reorder Point
Every business aims to grow its sales. For this, management of the inventory levels is crucial. One aspect of inventory management is maintaining an adequate stock level. It is essential to timely meet customer demand. To maintain the desired inventory level, one needs to timely reorder the sold goods. But what is the correct time […]
Raw materials
Raw materials are primary products from which one makes the final product. Everything we use is made up of a combination of basic materials. These are called its raw materials. They are available in the unprocessed form or semi-processed form. Businesses use these to produce finished products. We can understand this through various examples. The […]
Cycle Count
For any business, inventory management is crucial. It affects the costs and hence the profitability of a business. Cycle count is a concept which helps in the optimal management of the inventory. What is a cycle count? Cycle count is an inventory counting technique using sampling. It refers to counting a few items in […]
Distributed Inventory
What is a distributed inventory? A successful business must deliver the right products at the right time. Distributed inventory helps achieve this. Distributed inventory means storing the inventory across many distribution centers. A supplier chooses these centers close to the customers. This process helps in reducing the delivery time to the customers. It also makes […]
Forecasting
Forecasting means making estimates about the future. Based on these estimates, one carries out the required planning. Forecasting is based on data, opinions, and experience. In business, a company generally forecasts demand. Based on this demand forecasting, they plan the other business functions. This includes planning for the purchase of material, production, marketing, distribution, and […]