Inventory software programs now on the market let you track usage, monitor changes in unit dollar costs, calculate when you need to reorder, and analyze inventory levels on an item-by-item basis. You can even control inventory right at the cash register with point-of-sale (POS) software systems. POS software records each sale when it happens, so your inventory records are always up-to-date. Better still, you get much more information about the sale than you could gather with a manual system. By running reports based on this information, you can make better decisions about ordering and merchandising.<br><br>Sales tracking options. Different businesses get paid in different ways. For example, repair or service shops often keep invoices open until the work is completed, so they need a system that allows them to put sales on hold. If you sell expensive goods and allow installment purchases, you might appreciate a loan calculator that tabulates monthly payments. And if you offer rent-to-own items, you'll want a system that can handle rentals as well as sales.<img class='alignleft' style='float:left;margin-right:10px;' src='https://s-media-cache-ak0.pinimg.com/236x/1f/1e/25/1f1e252079a923cd51af928553abaa9e.jpg' width='262' alt='inventory management definition and meaning'/><br><br>In the example above, we use the following formula: (On Hand Inventory + Purchase Order Receipt) - (Unshipped Customer Orders + Forecast) = Net Inventory. Notice what happens in Week 6. The Net Inventory is negative, projecting <a href="http://www.confianzit.com/cit-blog/openerp-inventory-management-software/">open source inventory management</a> that we will be out of inventory. In this case, you should expedite the Purchase Order Receipt that is scheduled for week 7. Ideally, it should arrive in week 5 or 6, depending on your desired Safety Stock level.<br><br>Effective inventory management requires an understanding of the fundamental material management principles, data and work <a href="http://www.confianzit.com/cit-blog/openerp-inventory-management-software/">inventory management open source</a> processes that impact material supply and contribute to the total cost of the MRO operation. It also involves the establishment of realistic and measurable goals, along with disciplined approaches for achieving them. Most importantly, it requires a commitment of time from knowledgeable individuals to make informed, intelligent and often difficult decisions.<br><br>In the model, the blue-shaded figures represent stand-alone inventory management processes. In subsequent articles, each of these will be discussed in detail, providing background information, a fundamental understanding of the process, some guidelines for implementation and some helpful hints to maximize their effectiveness.<br>