Accurate order

A purchase request that matches the exact inventory requirements to avoid overstocking or stockouts.

Available Stock

The amount of inventory that is ready for sale or use at any given time.

Average Cost Method

A method of valuing inventory where the cost of goods is averaged over all units available for sale.

Barcode

A machine-readable code consisting of parallel lines or numbers that is used to identify and track inventory. Read more

Batch Number

A unique identifier assigned to a group of products manufactured together is used for tracking purposes. Read more

Batch Tracking

The process of tracking the production and movement of batches of products is often used for quality control and recalls.

Bill of Materials (BOM)

A detailed list of raw materials, components, and parts required to manufacture a product. Read more

Bulk Inventory

Large quantities of inventory items are stored together, often sold in bulk to customers or other businesses.

Carrying Cost

The total cost of holding and storing inventory, including rent, insurance, and depreciation. Read more

Cash Conversion Cycle

The time it takes for a business to convert its inventory investments into cash through sales. Read more

Centralized Inventory

A system where all inventory is stored in one central location for easier management and distribution.

Closing Stock

The total value of inventory a business has at the end of an accounting period.

Consignment Inventory

Inventory that a supplier gives to a retailer, but the retailer only pays for the goods once they are sold.

Cycle Counting

A method of auditing inventory where a small portion of stock is counted regularly, instead of conducting a full inventory count.

Dead Stock

Inventory that has not sold for a long time and is unlikely to sell in the future.

Decoupling Inventory

Extra inventory is kept on hand to prevent production delays due to supply chain issues.

Delivery Challan

A document that accompanies a shipment of goods, providing proof of delivery but not serving as an invoice.

Demand Forecasting

The process of predicting future customer demand helps businesses manage inventory levels and prevent stockouts or overstocking.

Dependent Demand

Demand for components or raw materials is based on the demand for finished goods, such as parts needed for manufacturing a product. Read more

Direct Materials

Raw materials that are directly used in the production of finished goods.

Discrepancy Report

A report that highlights differences between the recorded inventory and the actual physical stock.

Drop Shipping

A retail fulfilment method is where a business sells products without holding inventory; instead, the supplier ships the products directly to the customer. Read more

Economic Order Quantity (EOQ)

A formula used to calculate the optimal order quantity that minimizes total inventory costs, including holding and ordering costs. Read more

Ending Inventory

The value of inventory remaining at the end of a reporting period is used to calculate the cost of goods sold (COGS). Read more

Excess Inventory

Inventory that exceeds the current demand, leads to higher holding costs and the risk of obsolescence.

Expiry Date

The date after which a product is no longer considered safe or effective to use.

FIFO (First In, First Out)

An inventory management method where the oldest stock (first in) is sold or used first (first out). Read more

Finished Goods

Products that are fully manufactured and ready for sale to customers. Read more

Fixed Order Quantity

A predetermined quantity of inventory is ordered every time stock levels fall to a certain point.

Freight In

The cost incurred by a business for transporting goods from the supplier to its warehouse or store. Read more

Freight Out

The cost incurred by a business for transporting goods to its customers. Read more

Godown

A storage facility or warehouse used for keeping goods, commonly used in South Asia. Read more

Goods in Transit

Inventory that is being transported from one location to another but has not yet been received.

Goods Receipt

A document that confirms goods have been received from a supplier is often used to verify shipments and update inventory records. Read more

Gross Inventory

The total value of inventory before accounting for damages, losses, or obsolete stock.

Hedge Inventory

Extra inventory is kept to guard against potential supply chain disruptions or price increases.

Holding Cost

The cost associated with storing and maintaining inventory, including warehousing, insurance, and security expenses.

Idle Inventory

Stock that is not being used or sold often leads to higher holding costs and a risk of obsolescence.

IMEI Number

A unique identifier is used to track mobile phones and other electronic devices, often used for inventory tracking. Read more

IMEI Tracking

Monitoring inventory items using their unique International Mobile Equipment Identity numbers for better asset management.

Inbound Inventory

Goods are received in a warehouse or storage facility, typically from a supplier or manufacturer.

Inventory

The complete list of goods and materials a business keeps in stock, either for selling to customers or use in production. Read more

Inventory Allocation

The process of assigning available stock to different customer orders or locations, ensuring timely fulfilment.

Inventory Audit

The process of verifying and counting physical inventory to ensure accuracy with recorded stock levels. Read more

Inventory Classification

The grouping of inventory items based on their value or importance, often using methods like ABC analysis to prioritize management efforts.

Inventory Control

The process of managing stock levels, ensuring that the right amount of inventory is available to meet customer demand without overstocking. Read more

Inventory Days

A metric that shows the average number of days it takes for a company to sell its inventory. Read more

Inventory Forecasting

The process of predicting future inventory needs based on historical sales data, trends, and market conditions.

Inventory Holding Cost

The process of spreading the cost of a tangible asset over its useful life, allows a business to allocate the expense gradually.

Inventory Management

The process of ordering, storing, and tracking a business’s stock to ensure optimal inventory levels. Read more about Inventory Management.

Inventory Optimization

The process of ensuring that a business has the right amount of stock to meet demand while minimizing holding costs and reducing stockouts.

Inventory Projection

A prediction of future inventory needs based on sales forecasts and current stock levels.

Inventory Reconciliation

The process of comparing actual inventory counts with recorded stock levels to identify discrepancies and ensure accuracy. Read more

Inventory Shrinkage

The loss of inventory due to theft, damage, or errors, resulting in less stock than recorded. Read more

Inventory Tag

A label or barcode is attached to inventory items for identification and tracking purposes. Read more

Inventory Tracking

The process of monitoring inventory movements, such as receiving, storing, and shipping, to maintain accurate stock levels.

Inventory Turnover

A ratio that shows how many times a company’s inventory is sold and replaced over a specific period, indicating inventory efficiency.

Inventory Valuation

The process of assigning a monetary value to a company’s inventory, often using methods like FIFO, LIFO, or weighted average cost. Read more

Inventory Variance

The difference between the recorded inventory and the actual physical inventory, is often due to shrinkage, errors, or theft.

Item Unit

The basic measurement used for inventory items, such as pieces, boxes, or kilograms.

Just-in-Time (JIT)

An inventory management method where stock is ordered and received only when needed for production or sale, reducing holding costs. Read more

Landed Cost

The total cost of acquiring goods, including the purchase price, shipping, taxes, and any other fees related to bringing the goods to their destination. Read more

LIFO (Last In, First Out)

An inventory valuation method where the most recently acquired items are sold or used first. Read more

Lot Number

A unique identifier is assigned to a specific batch of products, used for tracking purposes in production and distribution. Read more

Low Stock

A situation where inventory levels are nearing the reorder point, signalling the need to replenish stock to avoid stockouts.

Manufacturing

The process of producing goods from raw materials or components, typically in large quantities, for sale or use. Read more about Manufacturing

Manufacturing Date

The date on which a product was produced or assembled, often used for tracking and quality control.

Minimum Order Quantity (MOQ)

The smallest quantity of a product that a supplier is willing to sell or that must be ordered to meet production needs. Read more

Obsolete Inventory

Stock that is no longer sellable or usable due to age, changes in demand, or product updates, often results in a write-off. Read more

On-Hand Inventory

The current quantity of inventory is physically available in stock.

Opening Stock

The value of inventory a business has at the beginning of an accounting period is used to calculate the cost of goods sold (COGS). Read more

Order Lead Time

The time it takes from placing an order with a supplier to receiving the goods, including production and shipping times.

Order Picking

The process of selecting and retrieving items from inventory to fulfil customer orders. Read more

Order Point

The inventory level at which a new order is triggered to replenish stock helps to avoid stockouts.

Out of Stock

A situation where inventory is depleted, and products are unavailable for sale, leading to potential lost sales.

Outbound Inventory

Products that are being shipped out of a warehouse or facility to customers or other locations.

Overstock

Having more inventory than is needed to meet current customer demand, leads to higher storage costs and the risk of obsolescence.

Overstocking Penalty

The cost or consequences of holding too much inventory, including increased carrying costs and potential product obsolescence.

Packaging

The materials used to protect and present products during storage, shipping, and handling.

Packing List

A document that details the items included in a shipment, is used by the recipient to verify receipt of all goods ordered.

Perpetual Inventory

A system where inventory records are updated in real-time as stock is received or sold, ensuring accurate and current data. Read more

Physical Inventory

A manual count of all stock on hand is usually conducted periodically to reconcile inventory records with actual stock.

Pipeline Inventory

Stock that is currently being transported or in the process of being produced, but not yet available for sale.

Procurement

The process of sourcing and purchasing goods or services needed for business operations, including vendor selection and contract negotiation.

Quantity on Hand

The actual number of inventory items available at any given time, ready for sale or use.

Raw Material

Basic materials used in the production process to create finished goods, such as metals, fabrics, or chemicals. Read more

Real-time Stock

Current, up-to-the-minute inventory levels, enabling accurate stock management and order fulfilment.

Reorder Point

The inventory level at which new stock should be ordered to avoid running out before the next shipment arrives.

Replenishment

The process of restocking inventory to maintain desired levels and prevent stockouts.

Reserved Stock

Inventory that has been set aside for a specific customer order and is no longer available for general sale.

Restock

The process of replenishing inventory when supplies are low, crucial for maintaining operational efficiency.

Retail Inventory

Stock held by a retailer that is available for sale to end customers.

Return on Inventory

A financial metric that measures how much profit a company generates from its inventory investment.

Safety Stock

Extra inventory is kept on hand to protect against stockouts due to sudden demand increases or supply chain disruptions. Read more

Scrap Inventory

Inventory that is damaged or no longer usable is often discarded or sold at a reduced price.

Serial Number Tracking

A method of tracking individual items using unique serial numbers assigned to each product.

SKU (Stock Keeping Unit)

A unique identifier used to track individual products in inventory, helping with organization and stock control. Read more

Slow-Moving Inventory

Products that have low sales velocity and remain in stock for longer periods, increase the risk of obsolescence.

Spoilage

The loss of inventory due to damage, expiration, or other factors that make it unsellable. Read more

Stock Adjustment

Changes made to inventory records to account for discrepancies, such as damaged goods or incorrect counts.

Stock Aging

The process of tracking how long inventory has been in stock helps identify slow-moving or obsolete items. Read more

Stock Alerts

Notifications are triggered when inventory levels reach a predefined threshold, ensuring timely replenishment.

Stock Control

The process of managing inventory to ensure the right quantities are available without overstocking or stockouts.

Stock Ledger

A record of all inventory transactions, tracking the movement of goods in and out of stock.

Stock Level

The minimum amount of stock that should be kept on hand to meet regular demand, below which a reorder is triggered.

Stock Maintenance

The activities involved in keeping inventory in good condition, ensuring accurate stock levels, and preventing damage or loss.

Stock Status

A real-time report of the availability and condition of inventory, such as in-stock, low-stock, or out-of-stock.

Stock-Out

A situation where inventory is completely depleted, resulting in the inability to fulfil customer orders.

Supplier Lead Time

The time it takes for a supplier to deliver goods after receiving an order, influences the reorder point for inventory management.

Supply Chain

The network of suppliers, manufacturers, and distributors involved in producing and delivering goods to customers.

Surplus Inventory

Excess inventory that exceeds current demand often leads to higher holding costs and the risk of obsolescence.

Turnover Ratio

A ratio that shows how often inventory is sold and replaced over a given period, indicating the efficiency of inventory management. Read more

Unit of Measure

A standard measurement is used to quantify inventory, such as pieces, boxes, or kilograms. Read more

Unplanned Inventory

Stock that is not anticipated often results from overproduction or canceled orders, and can lead to excess inventory. Read more

Unsellable Inventory

Inventory that cannot be sold due to damage, expiration, or other issues, is often written off or discarded.

Vendor-Managed Inventory (VMI)

A system where the supplier is responsible for managing and replenishing inventory levels for the customer. Read more

Warehouse

A storage facility is used to house inventory until it is needed for production or sale.

Warehouse Inventory

The stock of goods stored in a warehouse, ready for distribution or sale.

Weighted Average Cost (WAC)

An inventory valuation method where the cost of all items is averaged based on the total value and quantity of stock.

Work in Progress (WIP)

Items that are in the process of being manufactured but are not yet completed products.

Write-Down

Reducing the value of inventory in the financial records due to a decline in market value, damage, or obsolescence. Read more

Write-Off Inventory

Removing inventory from the financial records because it is damaged, lost, or no longer usable.

Zero Inventory

A strategy where a company keeps very low or no stock on hand, relying on just-in-time delivery to meet demand.