Answer to Question #198714 in Management for Samukelisiwe

Question

Reducing stock level is a common objective of modern businesses. Discuss the most practical method(s) that warm and cosy could utilise to reduce their stock if needed.

Answer 1

Safety stock inventory.

Safety stock inventory management is extra inventory being ordered beyond expected demand. This technique is used to prevent stockouts typically caused by incorrect forecasting or unforeseen changes in customer demand.

FIFO and LIFO.

LIFO and FIFO are methods to determine the cost of inventory. FIFO, or First in, First out, assumes the older inventory is sold first. FIFO is a great way to keep inventory fresh.

Batch tracking.

Batch tracking is a quality control inventory management technique wherein users can group and monitor a set of stock with similar traits. This method helps to track the expiration of inventory or trace defective items back to their original batch.