![]() Procurement best practices : Procurement best practices are techniques to streamline procurement and make it more efficient. For instance, a supplier may not let you order just one product but must require that you order five. Order quantity multiple: Suppliers may require the retailer to order multiples when they need their customers to order items in a set number. ![]() Suppliers usually use the demand history to determine the order quantity minimum. Order quantity minimum: The order quantity minimum refers to a number (which the retailer negotiates with the supplier) used to determine the minimum amount of product that a customer must order. Order quantity: Order quantity refers to the set number of units ordered when inventory levels reach the designated reorder point. VMI allows for cost-cutting and avoids overstocking. Vendor-managed inventory (VMI) : Vendor-managed inventory (VMI) refers to pushing all merchandise responsibility from the retailer to the manufacturer. Phantom inventory : Phantom inventory refers to stock that the inventory system classifies as sellable inventory that’s available in the store even though there’s no actual marketable item. The minimum level of inventory: The minimum level of inventory refers to the level of stock that will trigger a replenishment in an inventory system using a minimum/maximum inventory policy. The order quantity will depend on how big the gap is between the available and maximum figures. The maximum level of inventory: The maximum level of stock refers to the “order-up-to” number in an inventory system that uses a minimum/maximum inventory policy. Inventory optimization: Inventory optimization is the management process that allows for maximum service at the lowest possible cost. It can help suppliers plan their business operations. Inventory forecasting: Inventory forecasting is a system that predicts inventory levels, service level performance, and expenses for the future. Inventory cycle: The term inventory cycle refers to the process of planning and managing inventory levels. Inventory control is also a synonym of stock control. ![]() Inventory control : This important replenishment glossary term refers to a retail vendor’s use of procuring and managing stock. It involves grouping products into three distinct categories: finished goods, work-in-process (WIP), and raw materials.įive types of inventory : The five types of stock are packing materials, work-in-process (WIP), raw materials, finished goods, and maintenance, repair, and operating (MRO). Other replenishment terms and definitionsĪggregate inventory management : Aggregate inventory management is a simple method of managing stock.The replenishment glossary terms are subcategorized into the following sections: This replenishment glossary provides a broad overview of replenishment terms and definitions with which retail vendors should be familiar. The word “ replenish” technically means to complete or make full again. Alternatively, if the customer wants more product on top of what the supplier has already sent, we also call this replenishment. Replenishment refers to the process of sending additional materials to the customer on top of what has already been fulfilled.įor example, if a retailer needs additional goods from a supplier, it might fill out an order form to replenish its supply. For example, many people confuse replenishment with fulfillment – but these are two very different areas.įulfillment refers to the process of executing and completing a customer order, including packaging, shipping, and processing payment. ![]() Replenishment terms and definitions are one key point.
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