Decision support software is available today that has not been available in years past. Inventory management as it was known before is now changed. Decision support for inventory management software is making it easier for business manager to analyze data that they did not have access to before. They are now better able to make business decisions based on facts. One of the things that an inventory manager must keep tabs on is the EOQ (Economic order quantity). This quantity has been described as the quantity you should order in order to keep your combination of ordering costs and holding costs at its lowest possible point. An inventory manager who is not optimizing the economic order quantity is asleep on the job.
As an inventory manager one of the things you will have to do is stay on top of fluctuations when you do your math. One of the major variables that is constantly fluctuating is demand. Even if all things remained constant, carrying out a manual determination of the EOQ would be time consuming especially if your firm is a large one. The option in such a situation becomes decision support software. This software is easy to integrate into your computer system so that you EOQ can be determined with ease and in a much shorter period of time.
In order for this to work you will need to enter your sales forecasts into the system, which will reflect to the inventory manager as demand for the period specified. With that information, the inventory manager will be able to figure out the holding costs as well as the ordering costs for what it will take to meet the said demand. He will then go ahead and enter them into the system. Having calculated his EOQ the inventory manager will be able to order stocks that will cost the company the least amount of money. The cool thing about this system is that the accountant will also get his figures making it easy all round.
Decision support for inventory management is an investment that will save you a lot of money in the long run. It will not only help you find your EOQ but will also take into account many other variables in order to make your inventory management cost effective. Variables such as the cost of warehousing and lines of credit extended to you will all be factored in. It’s a tool you just can’t live without.
If you have been looking for a great way to manage the decisions you make with inventory look no further than decision support for inventory management.
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