Sep 4th, 2010 | Written by tc | Posted in Business |

Types of Inventory Systems

Managing your business goes hand in hand with managing your inventory. Your business will not survive without the inventory. Having a well filled and organized inventory can and will help your business in the long run. In managing your inventory, there are a variety of systems to choose from.

Eye-ball System

Small scale businesses like those who engage in retail businesses usually perform the eye-ball system of inventory control. This is a very simple way of managing the inventory. It is as simple as going into the supply room and looking at the supplies that are low in number. The person in charge may then decide to repurchase more supplies. The down side of this system is that the number of supplies may never be noticed to be at zero quantity until the management takes a look at the supply room. And having no supply means no sales for the entire time that you do not have the stocks.

Reserve Stock System

The reserve stock system is much more systematic than that of the eye-ball system. As stated in its name, it involves keeping a reserve stock of items. Once the last of the main supply has been used, the company may then open up the reserves in order for them to still be able to sell such items that are in demand. At this time, the management will make a reorder of items.

The calculation of the number of the reserve stock is simple as long as you know how much of the items are consumed per week and when the stocks will arrive. For example, if you sell 50 units of an item per week and shipping usually comes in every three weeks, your reserve stock should be twice the amount of the number of units sold per week (giving you 100 units of reserved stock). When the new supplies arrive, the determined number of reserved stock is packaged and stored or the reserve stock is refilled and placed at the back of the supply room.

Perpetual Inventory Systems

There are quite a number of perpetual inventory systems available and these include manual and computer operated systems. In computer operated systems, the system is programmed to trigger a reorder when the supplies reach a certain level. These systems may be used to easily categorize the supplies and to help maintain appropriate levels in the stock room.

These types of inventory control systems are just a few of the many available today. You may choose from the simple systems or from the more complex inventory control systems. Just remember to choose a system that is a good fit for your company.

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