Inventory is an asset that is owned by a business that has the express purpose of being sold to a customer. This includes items sold to end customers or distributors. It includes raw materials, work in process, and finished goods. The management of inventory is a key concern of all businesses. If a company's inventory level is too low, it risks delays in fulfilling it's customers orders. If the inventory is too high, it is tying up dollars that can be better used in other areas. It also risks obsolescence and spoilage. Successful businesses keep their inventory turns high, but also keep their service level at or above the industry standard.<br><br>There are plenty of popular POS software systems that enable you to use add-on devices at your checkout stations, including electronic cash drawers, bar-code scanners, credit card readers, and receipt or invoice printers. POS packages frequently come with integrated accounting modules, including general ledger, accounts receivable, accounts payable, purchasing, and inventory control systems. In essence, a POS system is an all-in-one way to keep track of your business's cash flow.<img class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src='http://1.bp.blogspot.com/-HvSEcuNx12k/UCjxbsZ9wLI/AAAAAAAACKI/VgEuwaGBmPY/s1600/What+is+Inventory+Management-1.jpg' width='263' alt='what is inventory management meaning'/><br><br>In the example above, we use the following formula: (On Hand Inventory + Purchase Order Receipt) - (Unshipped <a href="http://www.confianzit.com/cit-blog/openerp-inventory-management-software/">open source inventory management software</a> 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 warehouse 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>The blueprint for success is Integrated Inventory Management. This methodology provides a vehicle that helps arrive at the right decisions about what to buy, when to buy it, what to keep in stock and what to eliminate. It provides a disciplined process that effectively controls storeroom investment and associated inventory costs while maintaining an acceptable level of service.<br><br>As mentioned earlier, the cornerstone of the Integrated Inventory Management model is data integrity. This by no means implies that a program cannot be started without 100 percent complete and accurate information. In fact, many of the work processes incorporate data collection, analysis and correction. However, some level of data availability is essential in order to embark on this journey.<br>