Inventory Management Terms, Defined.
Plain-language definitions for the terms that come up when you're trying to get your inventory under control. No MBA required.
All terms
Purchase Order
A written document that authorizes a purchase from a vendor. It specifies what is being ordered, how much, at what price, and when it should be delivered.
Perpetual Inventory System
An inventory tracking method that updates stock counts in real time as items are received, sold, or adjusted. As opposed to only counting at scheduled intervals.
Inventory Management
The process of ordering, storing, tracking, and controlling a business's goods. Good inventory management means knowing what you have, where it is, and when to order more.
Vendor Management
The process of selecting, monitoring, and managing the suppliers your business buys from. This includes tracking vendor contacts, purchase history, and pricing.
Safety Stock
A buffer quantity of an item kept on hand to prevent stockouts caused by unexpected demand or supply delays. Also called buffer stock.
Inventory Turnover
A ratio that measures how many times a business sells and replaces its inventory over a period. Higher turnover generally means better cash flow and less waste.
PAR Level
The minimum amount of an item you need on hand to operate without interruption. When stock falls below PAR, it's time to order. Common in food service.
Stock Management
Another term for inventory management. Refers to the process of overseeing the ordering, storing, and use of a company's goods.
Simpentory handles all of this.
Purchase orders, vendor management, zone-based tracking, and a full activity history. The terms in this glossary aren't abstract concepts in Simpentory. They're features you use every day.
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