Learning inventory management jobs key terms not only helps you sound knowledgeable when talking with others in the industry, but it also offers insight into strategies you could implement to increase your profit margin. Use the terms to make inventory decisions that work best in your unique situation.
Knowing inventory management jobs key terms gives you a glimpse into the inner workings of the industry, and helps you communicate better with other businesses and distributors. It also shows others that you know what you are talking about when you use the terms.
Also called ABC, this term refers to a manager's job of breaking down overhead costs, distributing costs into specific activities in both vendor and customer management.
This term refers to an order a manager places for a certain quantity of a specific product for a pre-determined timeframe without a specific delivery date. For example, a business might order a group of supplies it plans to purchase over a one-year time period. This often reduces costs and increases the chances of shipment arriving in a timely manner.
This term has several definitions in the inventory management industry. Sometimes it refers to standard products a manager knows are generally available for consumers from a variety of sources. The term also refers to a specific category in inventory. When this happens, managers and suppliers need to know commodity codes for unique groups of items in order to make their analysis and reports.
Distribution requirements planning
Distribution requirements planning, also called DRP, is a process where a manger determines requirements for inventory in an environment for several warehouses and plants. The term sometimes refers to the task of determining requirements for space in a warehouse.
Businesses use different criteria for determining excess inventory. Some managers count it as inventory held beyond a specific time period and others count it as inventory that exceeds order quantities. Part of the manager's job is to identify excess inventory and to decide how to handle it.
This term refers to the amount of product sold and consumed within a year. Most businesses managers determine this by dividing the year's inventory usage by the average level for inventory.