Managing Inventory

Par stock is the inventory of goods that an operation must have on hand to continue operating between deliveries. It is important to maintain a proper par stock to avoid running out of essential items. On the other hand, it is costly to maintain a larger inventory than necessary.This is partly because part of your operating cash is tied up in unused inventory. Secondly, excessive inventory of perishable items can lead to spoilage and thus to loss.Accurate forecasting of future business, based on careful study of past business, is key to managing inventory and establishing par stock.

Write specifications for each item purchased carefully so that the item is described accurately. Compare price and quality offered by several vendors in order to get the best quality for the best price. Order from up-to-date quotes and price lists.

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