Retail Inventory Management is matching your supply to projected demand on each shelf in any retail channel, while catering for supply chain constraints (like pack sizes and minimum order quantities) and the uncertainties that typify the industry.
We say that the business is Understocked when it is likely that demand cannot be fulfilled. This happens when the re-order point is too low, the lead-time is too long or when sales are suddenly higher than what we ‘reasonably expected’.
Since orders are always placed up to the re-order point, any ‘economic inventory’ greater than what is ‘on hand’ plus what is ‘on the way’ (in transit or on order) is called ‘Overstock’.
SKU stands for Stock Keeping Unit. It is a unique product (defined by its Style, Colour, and Size) in a unique location.
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