Stock is cash on a shelf
Too much stock ties up money and risks dead inventory; too little means missed sales and unhappy customers. Inventory turnover shows how fast your stock sells and is replaced, and days of inventory shows how long it lasts at current sales.
Order at the right time, in the right amount
A reorder point tells you when to order: when stock falls to the level you will sell during the supplier’s lead time, plus a safety buffer. Economic order quantity (EOQ) tells you how much to order to balance the cost of placing orders against the cost of holding stock. Used together, they replace guesswork with a simple rule for each product.