How much stock to carry?

The aim of a business is to maintain stock at optimum levels. (Not minimum, but optimum!) This is determined by a range of factors:




  • The image of the store


Often not considered, especially by the accountants, but sometimes the right quantity might be very ‘minimalist’ – simply because that is the store image, It is not always about productivity.




  • The expectations of the customers


This is closely related to store image.




  • Cash resources/the line of credit available


Need I say more? Except that if this becomes a constraint or issue that prevents you from executing your strategy and your brand promise, then it must fixed quickly.




  • Product features


Some products store well and others don’t. The obvious ‘features’ that apply is fashion and perishable items, but it is very hard to predict the peak a faddish seller, so it is also particularly difficult to select order quantities.


And it goes without saying that retailers are also constrained by:




  • Space available

  • Lead times

  • Supplier policies