What kind of control is essential for effective inventory management?

Effective inventory management relies heavily on quantitative control because it involves measuring and analyzing numerical data associated with inventory levels, turnover rates, and stock management metrics. Quantitative control allows businesses to make informed decisions based on precise measurements, enabling them to track items accurately, predict restocking needs, identify trends, and optimize storage costs. This type of control focuses on key performance indicators (KPIs) related to inventory, such as days sales of inventory (DSI), inventory turnover ratios, and the accuracy of inventory records.

By using quantitative control, organizations can ensure they maintain the right amount of stock on hand to meet customer demand without overstocking, which can lead to increased carrying costs or waste for perishable goods. This method is crucial in avoiding shortages that could affect service levels or excess inventory that would deplete resources.