Optimal inventory level for a shoe store?

Asked a year ago

How do I determine what my optimal inventory level should be for my online shoe store? I'm currently finding myself having to discount a lot of old stock every 2-3 months so I'm clearly over ordering on stock. Is there a way to calculate an optimal stock level to help with my next order? Thanks.

Abeeha Qasmi

Thursday, March 09, 2023

The optimal inventory level for your online shoe store depends on multiple factors, such as your sales patterns, lead times, and cash flow.

Here are a few effective methods that you can use to calculate your ideal inventory level:

  1. Use historical sales data to determine your sales patterns to make educated decisions about how much stock levels should be present.
  2. Use economic order quantity (EOQ) calculations to find the order quantity that reduces total inventory costs.
  3. Use the just-in-time (JIT) inventory system to reduce excess inventory and improve cash flow.

Finding the right balance may take some trial and error, but using data-driven methods and careful planning can minimize excess inventory and maximize profits.

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