Post by account_disabled on Feb 22, 2024 1:19:47 GMT -6
Inventory costs are inevitable in any company. Composed of smaller expenses, it can be reduced considerably with the right measures. You don't need to be a businessman to know that a business that spends more than it earns is doomed to failure. There are extremely profitable businesses that, due to financial disorganization, fail. For this reason, cost rationalization must be part of the company's DNA. This is especially important in inventory control , which deals directly with the heart of the business and should reduce storage costs. Check out now how to optimize your products in stock and reduce costs in your company! Click to go straight to the topic that interests you: What is inventory cost? How to calculate inventory cost? Order cost Cost of adjustments Stocking cost How to reduce inventory cost? Informatization Know your consumer behavior Adequate storage space Have a trustworthy team Loss reduction techniques Have a safety stock Stay tuned for product updates What is inventory cost? Inventory cost An adequate storage location can significantly reduce inventory costs.
As much as it is a single expense, the inventory cost is the sum of several expenses . It includes all costs related to the storage of items necessary for the operation of the business. Its reduction is one of the main objectives of inventory management. However, this goes far beyond the cost of renting the place where you keep your goods: calculating the cost of inventory depends on many variables , some Lebanon Mobile Number List of which are not even under your control. In this way, representing the value that the company ends up losing by having investments stopped in stock, instead of having this value invested in more profitable opportunities. Among the main inventory costs are: Maintenance and storage costs: Factors such as taxes and insurance on products and physical inventory space; Order cost: Process of purchasing products and inputs, considering factors such as communication and logistics; Product cost: Value of the product; Shortage cost: Loss generated by not delivering a product to the customer due to lack of stock, generating frustration and tarnishing the company's image; Service cost: Investment in the business’s workforce; Cost of risk: Related to the risks of loss of supplies.
How to calculate inventory cost? Not all variables that make up the inventory cost are under the manager's control. The global inventory cost must be calculated through the sum of costs. To make things easier, they are divided into three groups: 1. Ordering cost The order cost is made up of all expenses involved with delivering the order to the customer. It exists even if you are not an eCommerce. After all, even if you have a physical store, your employees will have to go to the stockroom to collect the product, which must be wrapped and placed in a bag. If you work with deliveries, the cost of this is also included in the bill. 2. Cost of adjustments When the company presents a production environment, the cost of adjustments for the business is added. Therefore, producing a new batch or a new product requires several costs such as inputs, administrative costs and even employees on the production line who will require more time to repair or remake the product.
As much as it is a single expense, the inventory cost is the sum of several expenses . It includes all costs related to the storage of items necessary for the operation of the business. Its reduction is one of the main objectives of inventory management. However, this goes far beyond the cost of renting the place where you keep your goods: calculating the cost of inventory depends on many variables , some Lebanon Mobile Number List of which are not even under your control. In this way, representing the value that the company ends up losing by having investments stopped in stock, instead of having this value invested in more profitable opportunities. Among the main inventory costs are: Maintenance and storage costs: Factors such as taxes and insurance on products and physical inventory space; Order cost: Process of purchasing products and inputs, considering factors such as communication and logistics; Product cost: Value of the product; Shortage cost: Loss generated by not delivering a product to the customer due to lack of stock, generating frustration and tarnishing the company's image; Service cost: Investment in the business’s workforce; Cost of risk: Related to the risks of loss of supplies.
How to calculate inventory cost? Not all variables that make up the inventory cost are under the manager's control. The global inventory cost must be calculated through the sum of costs. To make things easier, they are divided into three groups: 1. Ordering cost The order cost is made up of all expenses involved with delivering the order to the customer. It exists even if you are not an eCommerce. After all, even if you have a physical store, your employees will have to go to the stockroom to collect the product, which must be wrapped and placed in a bag. If you work with deliveries, the cost of this is also included in the bill. 2. Cost of adjustments When the company presents a production environment, the cost of adjustments for the business is added. Therefore, producing a new batch or a new product requires several costs such as inputs, administrative costs and even employees on the production line who will require more time to repair or remake the product.