Question

Is the stockout rate the only perfomance measure? Should there be others to inventory mangement?

Answer 1

Apart from stockout rate there other measures for inventory management. They include:

1. ATP- Available to Promise- Quantity that is available to meet demand for the period.

2. DOH- Days on Hand inventory- How many days'demand will the current inventory be able to fulfil.

3. Inventory turnover- Given the fixed amount of space, what amount of material can be kept in the same space for a given period. For e.g.: If twice the demand can be met with the same amount of space, considering the invetory gets replaced faster, if a sign of good inventory.

4. Inventory age: Often inventory is categorized as Slow moving, fast moving and non moving, depending upon the demand and sellout of the particular material in stock.