Analyzing Inventory To Maximize Profitability

Every company strives to improve profitability. Countless hours are spent in meetings devising ways to lower operating costs while increasing sales and gross margins.

4 major inventory challenges that affect corporate profitability:

  1. Dead stock does not provide a return on investment.
  2. Money invested in excess inventory is not available for other opportunities to earn profits.
  3. Stock outs result in lost profits since customers’ requests for products cannot be filled.
  4. Inefficient warehouse operations require excessive labor and equipment.