GEM-CAR FAQ
Minimum and Maximum Stock Management to Reduce Your Inventory
Objective: reduce the value of your inventory and keep in stock only what turns over 3-7 times a year.
Remember, every item you keep in inventory is not in your bank account.
If you keep $10,000 in inventory, that's the same amount that's not available in your coffers.
How do you decide on your minimum?
Daily consumption:
- Annual quantity consumed divided by the number of working days 220 days
Replenishment lead times :
- How often you will send your orders to your supplier considering 1 day for delivery.
Minimum stock = Daily consumption * Replenishment lead time
(round up to the nearest whole number)
Example 1:
- 300 filters per year of a rotating model
- Daily consumption = 1.36
- The minimum order list is issued on Monday, i.e. 5 working days + 1 day for delivery.
Minimum = 6*1.36 = 8.18 = 9 units
Example 2:
- 100 filters per year of a rotating model
- Daily consumption = 0.45
- The minimum order list is issued on Monday, so 5 working days + 1 day delivery time
Minimum = 6*0.45 = 2.72 = 3 units
Posted 4 months agoby Olivier Brunel
#55152 viewsEdited 2 months ago