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Care must be taken to ensure accurate products and stock are on hand as having the wrong inventory on hand, or housing too much inventory can deplete resources to dangerous levels. This highlights the need for effective management ensuring the business is aware of what stock they need to replenish and what needs to be shifted.
If inventory management is taken seriously and undertaken correctly, a business may find that it can reduce its costs and increase sales. An effective way of achieving this is by having an inventory management system in place, which will track and maintain inventory so that customer demand can be met. They can also be linked to the accounting or management aspects so that all operations can become more effective at reducing costs and maximising profit.
When we think of some objectives of Intelligent Inventory management we can identify them as being:
1. To ensure an adequate supply of products to a customer and to avoid shortages as far as possible.
2. To make sure that the financial investment in inventories is minimum (i.e. to see that the working capital of the business is maintained to the optimal level).
3. To ensure efficient purchasing, storing, consumption and accounting for materials are carried out in a systematic manner.
4. To maintain a timely record of inventories of all the items within the business and to maintain the stock within the desired limits.
Inventory is the second largest expense in the Veterinary Practice, next to the cost of labour. It often consumes 20% or more of gross revenue and left unchecked may swell to considerably more. Profitability becomes a challenge when large expense categories (like inventory) are not constrained to appropriate benchmark levels.
What percentage of your revenue is spent on Inventory? |
% |
What is the value of one day’s inventory? | $ |
How many days inventory do you hold? |
Days |
How many days Inventory do you have between routine orders? |
Days |
How many days Inventory can you reduce without affecting sales or production? |
Days |
How many orders do you place per annum? | # |
What is your cost associated with freight? | $ |
What is the cost on labour time used on managing Inventory? | $ |
How much time is there from placing the order to receiving the order? |
Days |
Animal Emergency Hospital Launceston (AEHL) is the only after-hours emergency veterinary clinic in Northern Tasmania. It was founded by Dr Lisa Reynolds in September 2023, who identified the need for an after-hours emergency service in the area. Although it...