Inventory

With inventory policy statements we can take all the guesswork out of how many parts we need to keep on hand, and when we need to re-order to keep up with current sales levels.

Inventory follows a sawtooth...

Our goal is to arrive at this statement for each part, sub-assembly, or product:

When inventory is at Re-Order Point order Lot Size

Use this generator to create nice-looking inventory labels without needing to do any math or design!

Upland Inventory Label Generator

Header Sub-Header Demand

How many did we sell last year?
Or project to sell this year?

Demand Timeframe Lead Time

How long to make parts or receive from supplier?

Lead Time Timeframe Lot Size

Size of production run or supplier order that makes sense.

Safety stock

If demand spikes when stock is low, how much buffer do we want?

Created By

Who created the policy?

Additional details

Any non-obvious notes about why you arrived at a particular assumption above.

Then print at 100% scale and cut out this 4"x6" label.

Place it near the inventory stack.
Make it easy to see!

When inventory is at Re-Order Point order Lot Size

Inputs

Demand: per

Lead time:

Lot size:

Safety stock:

Printed on

Created by

Additional details:

Inventory Equation - When to order?

Re-Order Point = Demand x Lead Time + Safety Stock

Re-Order Point = per week demand x weeks lead time + safety stock

Inventory Period = Lot Size / Demand

Lot size of Q / D per week demand = inventory period of T weeks

Notes:

keep the inventory period as low as possible
managing inventory is a tricky balance between holding enough stock to fulfill orders, and not tying up cash
as a small business, err on the side of not tying up cash!
adjust as necessary - things change as the business evolves and getting stuck with unsellable inventory is as bad as it gets...
if printing a screenshotted label, scale to 75% to keep same size as others