Topics: Inventory, Inventory control system, Perpetual inventory Pages: 2 (459 words) Published: March 8, 2013
Role of Inventory Systems
by Kevin Johnston, Demand Media

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Modern inventory systems help your business maintain profitability. Without a system, you could be wasting money on inventory without being aware of it. You may be buying too much or not buying enough. You could be spending money counting and trying to value your inventory. You may also be losing money because you don’t know where your inventory is. Sponsored Link

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The primary role of an inventory system is to track your products and supplies. An effective system keeps records of when you purchased inventory, when you sold it and how much you have on hand. It also tells you the location of your inventory. This can be particularly important if you use your inventory in various departments. For example, a supply of rubber may pass through production, go to shipping and end up in a warehouse in a remote location. An effective system lets you follow the way inventory moves through your company. Preventing Out-of-Stock Conditions

Your inventory system can alert you when you are running low on an item. This allows you to order it in a timely manner so you don’t have to turn customers away if you run out. In addition, you won’t have to order as much back stock to keep on your shelves because you can count on your inventory control system to alert you when levels drop to a critical point. Avoiding Duplication

You can easily acquire too much inventory by placing duplicate orders. This happens when an item is not on your storage shelf where it should be; if you assume you’re out of stock, you place another...
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