Six Types of Freight Forwarder Inventory

Six Types of Freight Forwarder Inventory

Inventory is a high-priced investment. Whether it is a production enterprise or a logistics enterprise, it is necessary to know and set up a useful inventory management plan correctly. Because of the divergence of reasons, inventory can be divided into six types: periodic inventory, in-transit inventory, safe inventory (or buffer inventory), investment inventory, seasonal inventory and idle inventory.

Cyclic Inventory - Inventory occurring in the process of replenishment. Cyclic Inventory is used to satisfy the demand under the premise of determination. The premise of its formation is that the enterprise can correctly forecast the time of replenishment.

In-transit inventory - goods in transit routes from one location to another. Before reaching the destination, in-transit inventory can be regarded as a part of periodic inventory. It should be noted that in the calculation of old stock commission books, the in-transit stock should be regarded as the stock of the origin of transportation. Because the goods in transit can not be used, sold or shipped at any time.

Safe Inventory (or Buffer Inventory) - Because of the uncertainty of production demand, enterprises need to hold safe or buffer stocks other than periodic stocks. People who hold this concept generally believe that the average inventory level of an enterprise should be equal to half of the order quantity plus safe inventory.

Investing Inventory - Investing Inventory is held not to meet current demand, but for other reasons, such as rising prices, shortage of materials or stockpiling to prevent strikes.

Seasonal Inventory - Seasonal Inventory is a form of investment inventory. It refers to the inventory accumulated before the beginning of the production season. The purpose is to ensure the constant labor force and production operation.

Idle stock - Inventory that does not exist in demand at any particular time.

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