Preventing Stockouts and Overstocking: Just-In-Time Inventory Tips

Having too little stock causes stockouts, driving customers to competitors. Carrying too much stock ties up working capital and increases warehouse expenses. Finding the balance is the core challenge of inventory planning.

Determining Your Reorder Point (ROP)

Calculate reorder points by multiplying daily unit sales by average supplier lead time, and adding safety stock. Setting up automated reorder alerts using this formula guarantees new stock arrives right as old stocks hit safety levels.