Monitoring inventory

In this lesson

1. 0:00 Introduction to inventory monitoring
2. 0:46 Stock takes and perpetual inventory systems
3. 2:12 Reconciling physical and recorded inventory
4. 3:34 Inventory controls and quality assurance
5. 5:16 Segregation of duties and ledger records
6. 6:50 Managing inventory levels and working capital
7. 10:18 Free inventory calculation
8. 11:28 Lead time and usage variations
9. 13:25 Reorder level and buffer inventory
10. 15:20 Maximum inventory and average inventory formulas
11. 18:24 Worked example: Acorn's reorder calculations

About this lesson

You'll discover the practical systems and controls that protect inventory assets, from perpetual inventory systems to physical stocktakes, and understand how to strike the right balance between holding enough stock to meet demand and avoiding excess cash tied up in storage. The video covers the mechanics of inventory management, including how to track inventory using ledger accounts, the difference between periodic and continuous inventory counts, and the controls you need in place to prevent damage, obsolescence, and theft. You'll explore how approved supplier lists, physical safeguards, and segregation of duties work together to protect your inventory investment. The lesson also explains free inventory—the stock actually available for production after accounting for allocated amounts—and why this matters when planning operations. You'll then move into the strategic side of inventory management: calculating your reorder level (the trigger point for placing orders), determining buffer inventory (the safety stock you maintain), and working out your maximum inventory level to ensure you're not overstocking. The video includes worked examples using real scenarios, such as calculating reorder levels based on maximum lead times and maximum daily usage, and determining holding costs. By the end, you'll understand how to apply these formulas confidently and see why balancing liquidity and profitability through smart inventory decisions directly impacts your business's financial health.

Duration: 22m