Products of high quality used to be considered luxuries rather than necessities. This is no longer the case. Furthermore, the cost of having to fix a quality problem after the sale is far more than ensuring it was done right before the sale. If you want your business to be a competitive force in the marketplace, quality is now a prerequisite. Product quantity .
Inventory is the largest investment of a typical small business.
Yet when you have capital tied up in inventory, it is not earning you any return. Therefore the goal is to determine the ideal order quantity and reorder point for each item to ensure that you always have stock on hand while also minimizing your overall inventory. If you stock too little, you'll risk dissatisfied customers, while if you stock too much, you incur additional costs as well as increase the risk of obsolete inventory. Product cost . Resist the temptation to strive for the lowest possible cost.