Last updated August 24, 2023
What is inventory?
Inventory are products that include raw materials (production inventory and work-in-progress inventory), and merchandise used to make a finished product or that will be sold directly to the end consumer.
Is ‘inventory’ and ‘stock’ the same?
Inventory is a broader term that encompasses all the goods, materials, and products that a business holds for production, resale, or consumption. It includes raw materials, finished goods, spare parts, supplies, and any other items a business needs to function.
Stock, on the other hand, refers to all products that are already in the warehouse ready to be delivered to consumers or fulfill their purpose. It has nothing to do with a stage in the supply chain, as is the case with inventory. It is what is available to serve customers.
Inventory replenishment is crucial for an effective supply chain. The goal is to ensure that the right amount of stock is available to meet customer demand while avoiding excessive carrying costs. The reorder point method can help set a specific inventory level at which a new order is placed to replenish stock.
Inventory management tools are software solutions designed to help businesses efficiently manage their inventory throughout the supply chain. These tools provide capabilities for tracking, monitoring, and optimizing inventory levels, orders, and stock movements.