Inventory management

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When we own a company we realize that there are some aspects to which we must pay a lot of attention, otherwise the whole set would derail until we find ourselves in a situation of no return. One of these elements is inventory management, with which we look for a coordination of the necessary materials for the activity that we are going to carry out.

What is inventory management in logistics

Logistics management is either intertwined or you could say it is a branch of cost accounting. It is defined as the administration of the records, purchase and exit of the inventory that we have within our company.

It must be understood that every company has a minimum stock to meet the demand that consumers make of their product. In the same way, it needs a base from which to sustain itself in case there is an over demand, so that production does not stop.

In the same way, each company works at different rates linked to the type of product they market. For the same reason, it is impossible for there to be only one way to carry out an inventory. This means that a detailed analysis of the raw materials, the orders we place until the product is delivered, is necessary.

Inventory management models

To understand the different inventory management models, we must first take certain classification criteria, these based on demand characteristics. If it is a demand that is known exactly, where there is no doubt about the products that are wanted, it usually occurs in very well organized orders. The other case occurs when it is an uncertain demand and there is no total certainty of future demands. Therefore, everything is subject to complex calculations.

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The time variation in demand is also an aspect that we must take into account when we talk about management models. This refers to time and the variation of it in the different areas of the order, since time is a very important factor for this type of situation.

Deterministic model

Taking into account the above issues, the different models can be divided into several categories. The first of these is the deterministic model. Here, each input of what we produce must invariably be the same as the one that will be output, without regard to chance or the different issues that may occur along the way. This type of model is very difficult to fulfill in reality, especially if we understand that there are hundreds of variables when we talk about inventory in a company. It is used, above all, in analysis and simulation of specific situations.

Non-deterministic model

Unlike the previous one, the non-deterministic model considers all kinds of factors that cannot be contemplated or predicted. Therefore, only certain characteristics can be modelled because the magnitudes will be very varied and the evolution will be very difficult to define. This type of model is used for actual sales, which fluctuate according to the period and its value.


If you have been reading our blog regularly, you will have noticed that we have talked several times about how to manage different aspects of your store. We haven’t discovered anything new, it is clear that every activity involves management. That’s why we hope we’ve helped you with inventory management, as it’s one of the most important, and that’s why we have included it in the many functions of our ERP software for ON and OFF stores. And if you have any questions, you can leave them in the comments!

You can also read  Minimum and maximum stock: What are they?


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