Inventory Management During Peak Selling Periods

Avatar The peak selling period of the year is a time when the inventory management of many businesses are put to the test. Those who are well prepared will profit while those who aren't may suffer a loss. The following will help you to successfully get through this challenging time:

Get Your Demand Forecast Right

This is very critical because there are more ways a business can lose money besides over stocking or under stocking their inventory: they can stock up on the wrong products. The demand forecast is the first crucial step in preparation.

Careful analysis of past peak season demand patterns must also take into account changing trends in consumer demand in terms of product types and their quantities. Remember to include the effects of a changing economy. If consumer demand has been generally higher or lower this year than in previous years, then the demand forecast should take this into account.

Prepare Your Supply Chain

Even though you hope to get your inventory properly sized, if the demand exceeds your expectations, you want to be sure that your supplier will be able to quickly respond to your purchase orders. If they have recently become unreliable or if you foresee serious problems such as a possible labor dispute, make sure to identify some alternate suppliers.

Since your inventory levels are normally higher this time of year, now is the time to take advantage of bulk rate deals with your suppliers. Don't be shy about negotiating with them.

Focus Your Effort On The Most Important Items First

Use the 80/20 rule to identify the 20 percent of products in your inventory that yield 80 percent of your profits this time of year. Get those in place before spending time on the less profitable products.

Use An Inventory Management System

Without an inventory management system, you can't dynamically track the status of your stock. If your inventory is dropping faster than predicted, the right software will alert you to this. It can be set to give a warning if inventories get too low or if the rate of inventory drop gets too steep. This forewarning of a possible stockout gives you time to place an order with your suppliers before you run out of stock.

For more information about inventory management, contact us today.

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