Tag Archive: Inventory Quality Ratio

Three Ways to Prevent Excess Inventory

Inventory levels greater than the amount needed for production or sales now is excess. Excess can mean you don’t need for the inventory at this time, or that you have no need for the inventory at all. Excess inventory is to be avoided because it takes money to buy or build inventory. Many companies borrow to support their short-term cash needs. When you borrow, you pay interest. Every dollar paid in interest comes right off the bottom line.     The¬†¬†Inventory Quality Ratio methodology, www.InventoryPerformance.com, defines three steps to prevent excess. 1. Identify the excess, item by item 2. Find…
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