What is the minimum and maximum inventory stock?

The operation of a business It could be summarized in that customers request a product or service and it is the company that provides it. But, behind this process that seems simple there are several factors that must be considered by the company, so that, indeed, the commercial transaction can be carried out in a "normal" way.

When it comes to sale of products, or services for which certain products are needed, stock is one of the aspects most important parts of the company's operation, but what are the minimum and maximum stock for a business?

The Minimum and Maximum Stock

The safety stock

 Not always the number of consumers is the same, however, it is possible to prepare weekly or even monthly statistics of customers expected to have in the store, from this analysis it is possible to make a calculation of the minimum safety stock that would be the minimum number of stocks that could be had in the store's warehouse without causing breakages of stock.

East minimum stock It will be the one that allows the store to continue providing service to consumers, without them noticing lack of service or without breaking the chain of the same. When calculating the minimum stock, factors such as the delivery time of new orders must be taken into account, so that the volume of units is always kept within a few limits, so it is advisable to make sure to place orders before the minimum stock reaches the minimum, thus, even in the event of an unforeseen event, the company can continue to maintain the quality of its services.

The maximum stock

Not all companies can store the same volume of merchandise, there are factors that mean that in some types of businesses it is possible to speak of tons of products in stock, while in others the number is reduced to just a few tens or a few hundred.

However, in these cases and in the whole range of possibilities found between these, the maximum stock It is the maximum amount of merchandise that a business can store continuously.

Factors that must be taken into account to calculate the Minimum Stock and Maximum Stock of inventories

For any kind of deal, the dream would be to always have the maximum stock in the warehouse: in this way, an uninterrupted and "infinite" service could be given to all clients, but this is a certainly utopian idea because, in reality, there are several aspects that must be considered as part of the stock.

The costs associated with the storage of products is one of the most important, even when it does not have to be faced When paying a rent for the warehouse, a large warehouse implies a greater outlay of electricity, as well as more personnel to a management correct inventory.

We should not forget an effective program to manage products based on (location, entry dates, units, expiration ...). Therefore, having a high stock is not always the most profitable option, especially when the volume of sales of the company is not so high that the product leaves the warehouse in time to be able to cover the costs.

There are specific moments in which the product demand (of all those that the company offers, or of one in particular) is greater, in these types of situations, it may be interesting to place a bet on a larger stock of this product in order to cover the demand.

It will also be necessary to take into account the dependence on a supplier, who will be in charge of the distribution of the products, but who may suffer moments of excess orders or deficiencies of certain products, in this sense it is always necessary to avoid reaching the safety stock without having placed an order with enough time so that there is no breaking off. This type of distribution breakage situation should be anticipated especially when the supplier company It is new or it is the first time you have worked with them.