Carefully Consider Vendor Offers

Often vendors offer a bigger discount or other considerations for placing a larger order. It is tempting to always increase the size of a replenishment order to “get the extra five percent discount” or “qualify for free freight”.  Sure, buying at a lower unit cost...

Buy at the Right Time

Last month we discussed calculating the order cycle (also commonly known as the review cycle). That is, how often you should place replenishment orders with a vendor.  Another way of defining it is how often you sell or use enough of a particular vendor’s products to...

Out of Stock Reports are Worthless!

Many software packages include a notification when the on-hand quantity of a stock product is equal to zero, also called a stock-out report. You have no inventory left on the shelf. This type of notification is worthless in your quest to achieve effective inventory...

Are Past Sales a Good Indicator of Future Sales?

There are many systems that forecast future demand of products.  Most of these systems utilize a “time series forecast model”.  That is, they utilize some average of past sales or usage.  For non-seasonal products, they will calculate an average of what you sold over...