If you are using an Inventory Planning Spreadsheet, it’s vital that you understand the laws of supply and demand and how they affect your business. There are a number of ways that a good supplier and a good customer can impact your bottom line and your inventory. So when you are considering buying or leasing inventory, you should make sure that you have a full understanding of how they impact you.
Supply and demand are a law that has been in existence since the beginning of time. It says that the price of a good will always be equal to the amount of that good that is purchased. So if a lot of people are buying a particular item, then the price will rise, if there are not a lot of buyers, then the price will fall.
The way to better your business is to consider these two laws as part of your inventory planning spreadsheet. First, the demand for your product will determine the demand for your suppliers. As a result, your suppliers will increase their production or decrease their production in order to fill orders.
Learn the Laws of Supply and Demand in Your Inventory Planning Spreadsheet
This means that you’ll get a lot of inventory, but the prices will be higher than normal because of high demands. And this is good, because you have suppliers that can meet your demands at a higher rate than normal.
Second, supply is the sum total of all the products that are currently on the market. These products do not change and are not affected by demand. The supply for a given product will be the same no matter what the demand is.
In inventory planning, you have to understand the difference between supply and demand. When you look at your supplies on a spreadsheet, you should be looking at the total number of products. You don’t necessarily want to look at the price because that will affect supply.
Your supply is the total number of products that you currently have on hand. You can’t increase your supplies when your demand drops, because your suppliers will have no extra products to sell. So, when you examine your spreadsheet, you should look at the demand in terms of supply.
If your supply increases, you will see an increase in demand and vice versa. For example, if you run a restaurant, you have a lot of food on hand, so you should be increasing your stocks and decreasing your inventories. If you increase your stocks, you’ll increase your demand and reduce your supply.
In addition, look at the list items for your list. Look at your total product inventory and compare it to the list item amount. You should see a difference in stock levels, which indicates that you’ve been managing your supply correctly.
Remember, the difference between your inventory and the demand is your list items. You can’t increase your demand unless you increase your inventory. If you don’t manage your list properly, you could end up with less items than you think you need, which could result in reduced inventories.
Always check your stock levels once per week. If you wait until the last minute to check, you could miss a stock drop, which could send your inventory up. The goal is to manage your inventory so that you maintain the level that you want without being too aggressive.
The last piece of advice I can give you about inventory planning is to be sure that you don’t plan inventory during times of bad economy. If you check your inventory weekly, you won’t miss any shortages. YOU MUST READ : inventory spreadsheet example
