Inventory Available is the total amount of inventory on hand minus any allocations for specific orders or purposes. It represents the stock that is readily available for new orders, sales, or other immediate requirements.
In the realm of inventory management, understanding the exact amount of stock that’s available for immediate use is paramount. Inventory Available provides this insight. It’s the difference between the total inventory on hand and any inventory that’s been allocated or reserved for specific purposes.
By monitoring Inventory Available, businesses can make informed decisions about reordering stock, offering promotions, or managing backorders. It helps in preventing stockouts (where there’s no stock available to meet demand) and overstocking (where too much stock is held, leading to increased holding costs and potential wastage).
A bookstore has 100 copies of a particular book in stock. If 30 copies are allocated for an upcoming book signing event, the Inventory Available for sale to other customers is 70 copies.
A clothing retailer has 500 units of a specific shirt. If 200 are allocated for online orders and 50 for a store transfer, the Inventory Available for other sales is 250 units.
How is Inventory Available calculated?
Inventory Available = Total Inventory On Hand – Inventory Allocated.
Why is monitoring Inventory Available important?
Keeping track of Inventory Available helps businesses ensure they can meet customer demands, plan for sales or promotions, and make informed decisions about reordering stock.
Can Inventory Available go negative?
Ideally, no. However, discrepancies between physical stock and inventory records, or errors in allocation, can sometimes result in a negative Inventory Available, indicating a stockout.
How do businesses ensure accurate Inventory Available counts?
Regular stock audits, efficient inventory management systems, and real-time tracking of sales and allocations are methods used to maintain accuracy.
What’s the relationship between Inventory Available and Backorders?
If Inventory Available is zero or negative for a product, any new orders for that product might be placed on backorder until more stock becomes available.
