Saturday, April 29, 2017 8:22:11 AM
In distribution, there is a method to how many items you carry and how many times you replenish. You want to stock-out more or less because if you don't, it means that you are likely carrying more inventory than you need and tying up capital for no reason.
This WILL happen again, but the idea is that you replenish as close to stock-out as possible. Name of the game is efficiencies. You want to turn inventory a certain number of times per year. As the sales grow, the starting stock number will grow as well.
So it may only make sense to stock 100 patches now (round number) but towards the end of the year, due to demand, that number may grow to 1,000. But the # of turns remains the same. Maximize profit through efficiencies!
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