Perpetual inventory management

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rochona
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Joined: Thu May 22, 2025 5:25 am

Perpetual inventory management

Post by rochona »

Demand forecasting: Demand forecasting is the art and science of predicting customer demand for particular products. Accurate, timely forecasts are critical for businesses of all sizes. Factors such as seasonality, competition, geography, and the types of products you sell can all affect demand. All business decisions should be based on data, so forecasters should consider investing in the right tools for trend projection, market research, and more. Demand forecasting also helps you make decisions about how much safety stock to have on-hand in case demand suddenly spikes.

This technique relies on inventory management software to continuously track inventory levels in real time. By digitizing and automating the inventory management process, businesses can improve accuracy, maintain better control over stock levels, and reduce costs. Another key advantage of a perpetual inventory system is its ability to integrate with other systems across your business, like order management, accounting, customer service, and more.

Economic order quantity (EOQ): With this technique, you crunch the america phone number list numbers to determine your ideal order quantity, which helps you meet demand while minimizing the total costs associated with ordering, receiving, and holding inventory. The EOQ formula is an equation that can be used to pinpoint the optimal amount of inventory to request from a manufacturer or supplier.

EOQ is best used in situations where demand, ordering, and holding costs remain constant. Although the formula can be altered to determine varied production levels or order intervals, most businesses with extensive supply chains and high variable costs rely on algorithms within their computer systems to calculate EOQ.

Minimum order quantity (MOQ): This technique prioritizes purchasing the least amount of inventory possible. MOQ can be based on either the number of units or a dollar figure. It’s crucial to understand the impact of MOQs on your inventory and profitability. If you’re a buyer, you need to consider your inventory needs and storage capacity before committing to an MOQ. If you’re a seller, you should carefully set your MOQs to ensure profitability without deterring potential customers.
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