Written by No organization wants to have too much or too less stock.
If there is too much stock, it will result in wastage. And, if there is too less stock, the organization may not be able to fulfill its demand requirement as it will run out of stock before the next stock is delivered.
The ultimate goal of every organization is, therefore, to maintain an optimal stock level where there is neither overstock nor understock of goods.
In this post, I will explain some important concepts related to inventory management: minimum level, maximum level, average stock level, and re-order level.
These concepts help businesses to optimize their inventory and avoid overstocking or understocking.
