Inventory Costs
the cost of interest paid to borrow money
financing cost
Vendors and transportation companies need easy access to and within your facility
Receiving and shipping docks
As inventory is sold, it is subtracted from the inventory list. As new inventory arrives, it is added.
Perpetual Inventory System
the cost associated with the loss of inventory items that are broken, damaged, spoiled, or stolen
shrinkage cost
the cost associated with giving up the use of money tied up in inventory
opportunity cost
goods remain in their original crates, waiting to be broken down into more usable quantities
Bulk storage areas
a combination of systems
Partial Inventory System
rows of small and large inventoried goods that may be placed in bins or on pallets
Picking rows
the cost associated with renting or buying space needed to store inventory
storage cost
free space where inbound or outbound materials are sorted, organized, or temporarily stored
Staging areas
Suppliers deliver inventory just before it is used, stocks are kept at a minimum.
Just-in-time (JIT)
the cost associated with products or materials that become no longer or produced used while in inventory
obsolescence cost
insurance cost
the cost associated with insuring inventory
goods are assembled individually or as kits.
Assembly areas
You look at how much inventory you have in stock and compare it to what you want to have on hand.
Visual Inventory System
Boxing takes place
Packing areas