Inventory management is a science primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials.<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='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src='http://www.barcoding.com/images/accent_images/ip67.gif' width='264' 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 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 model shown on the next page (see Figure 1) may look complex, but essentially all that is required to implement an effective Integrated Inventory Management program is an understanding of basic inventory management processes, combined with an effective and disciplined application of associated best practices. With a good grasp of the underlying principles involved, a commonsense approach to implementation and a healthy dose of practice, almost anyone should be able to make prudent decisions about the best way to manage their inventory.<br><br>What follows is a brief definition or description of the main elements of the model. As mentioned earlier, the purpose of this article is <a href="http://www.confianzit.com/cit-blog/openerp-inventory-management-software/">open source inventory management software</a> solely to provide an overview of the entire process and identify key linkages. Nonetheless, this information should provide sufficient background to give a sense of what the entire process involves.<br>