How you manage your inventory has a big impact on how you run the rest of your business. That’s why I’d like to explore four inventory control methods to help you figure out which one will work best for your business.
This is probably the simplest way to manage your inventory. Basically, you set a maximum amount and a minimum amount of inventory to keep on hand. When the inventory level reaches its minimum, you order more, though you’re careful not to exceed the maximum amount.
This system works well for many types of companies. If you’re a retailer and you sell a lot of inexpensive products, you can use the Minimum-Maximum System just as well as a manufacturer who uses a lot of small parts to build their end products. It’s also a good fit for businesses with a lot of perishable items, like food and medicine, and they want to cycle through them as quickly as possible.