Wikipedia defines inventory optimization as “a method of balancing capital investment constraints or objectives and service-level goals over a large assortment of stock-keeping units (SKUs) while taking demand and supply volatility into account.”
Not to be confused with inventory management, wherein it involves supervising, storing, organizing and moving a company’s inventory.
Inventory optimization is ordering the right products at the right amount to meet target demands while being cost effective.
There are three key techniques to optimizing your inventory:The Balance Small Business “Inventory Optimization for Small Business”
1. Demand forecasting
2. Inventory policy
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