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How to profile inventory?
An inventory profile is used to track and report the movement of items, and the accounting of on-hand inventory quantities, based on the kind of activity that the company engages in. The general ledger transactions that correspond to inventory movements depend on the inventory profiles.
Profiling inventory is about finding out how much inventory you need for a particular event or season. It's important to not only think about quantity but also about what kind of inventory you want to sell. For example, if you are looking for Christmas or holiday inventory, then you would want to look for products that are seasonal, like clothing, decorations, candles, and other winter related items. Or, if you were looking for spring inventory, then you would want to look for items that have good resale value, like furniture, plants, and outdoor decor.
We do two kinds of profiling for inventory based on physical and behavioral characteristics. The idea behind both is to manage the inventory safely and efficiently.
The parameters we capture in physical inventory profiling are dimensions, weight, fragility, stackability, handling equipment restrictions, and storage ambiance restrictions. Questions such as, 'How high can they be stacked?' and 'Is it mandatory to keep the item upright?' should also be deduced from the parameters. These parameters help safe movement and storage of the inventory.
The parameters we capture in behavioral profiling include average storage time, expiry dates, etc. Behavioral profiling helps with planning and maximizing the operational efficiency of the warehouse by identifying and placing the items in the right place. For example, items with lower storage time are stored closer to staging areas. Items with expiry dates are allocated in chronological order. Expired items are withheld from shipment.