10 Types of Inventory Management
Summary
This type of inventory management divides various items into three categories based on pricing and is separated into groups A, B, or C, ranked by demand, cost, and risk data. It is commonly used in agriculture, mining, chemical manufacturing, and petroleum refining, where large quantities of raw materials or finished products must be transported over long distances. In addition, perpetual inventory systems are ideal for retail businesses selling goods with short shelf life, such as food, fashion, or electronics. The disadvantages are that it requires significant setup and ongoing costs to maintain and may not be suitable for small businesses with low sales volumes or limited resources. However, it can be expensive to implement MRP inventory management software, it is not as capable as an enterprise resource planning (ERP) system, and there’s less room for flexibility in the schedule.