Reporting inventory

What is the reporting inventory?

In warehouse logistics, the reported inventory describes the minimum quantity of material or products in the warehouse to ensure continuous availability. When the reported inventory is reached, a new order is automatically triggered to replenish the inventory.

What is the difference between reporting and minimum inventory?

The reported inventory is the threshold at which a new order/production is initiated, while the minimum inventory is the lower limit below which the inventory must not fall in order to avoid bottlenecks.

Calculation example:

A company sells T-shirts and needs an average of 50 pieces per day. The delivery time is 10 days and the minimum stock is 200 T-shirts. The reporting volume can be calculated as follows:

• Reporting inventory = (daily consumption × delivery time) + minimum inventory
• Reporting inventory = (50 T-shirts/day × 10 days) + 200 T-shirts
• Reporting inventory = 700 T-shirts

When inventory falls to 700 T-shirts, an order is triggered to replenish inventory and ensure shortages are avoided.