In a dynamically developing market, optimizing inventory management becomes critical to ensuring the profitability and competitiveness of a business.
There are four main methods of inventory management:
👉FIFO (First In, First Out) – a method in which the goods that arrived at the warehouse first are sold first. Suitable for perishable goods and goods with a limited shelf life.
👉FEFO (First Expired, First Out) – a method in which goods with an expiring shelf life are sold first. Used for goods with a short shelf life, where it is important to maintain freshness and quality.
👉LIFO (Last In, First Out) – a method in which the goods that arrived at the warehouse last are sold first. Used for goods with a long shelf life that are not subject to spoilage.
👉AVECO (Average Cost) – a method in which the cost of goods is calculated as the weighted average cost of all batches of goods in the warehouse. Suitable for goods with variable cost, where accurate inventory valuation is important.
The choice of the optimal method depends on:
👉Business specifics: industry, business model, target audience.
👉Type of goods: expiration date, sensitivity to external factors, turnover.
👉Pricing strategies: target margin, competitive environment, demand dynamics.
Inventory management automation:
Smartup is software that allows you to automate all inventory management processes:
🔥Product accounting: maintaining accurate records of quantity, cost, expiration dates and other parameters; setting up an inventory write-off method (FIFO, FEFO, LIFO, AVECO).
💥Order management: creating, tracking and fulfilling customer orders; the system automatically suggests which batch to take the goods from to comply with the selected method.
💥Warehouse operations: automation of receiving, shipping and movement of goods.
🔥Data analysis: receiving reports on the movement of goods, warehouse balances, etc.
Smartup is a simple and effective tool that helps increase the profitability and competitiveness of your business. Start optimizing your business today - register for a free demo of Smartup
P.S. Smart inventory management is not just a warehouse routine, but a strategic tool that leads to the prosperity of your business.
