Built right within SAP Business One are best practices in inventory management. With the software, you can achieve a Good and Better strategy for addressing your inventory supervision requirements.  The Good strategy starts with using min/max levels within the item master to take full advantage of your spend on purchased or sales items.  The Better strategy would be to make the most of the MRP, or Materials Requirements Planning fraction of the software. We’ll talk in more detail about them.

GOOD:  Basics of Using Min/Max Levels in SAP Business One

Minimum and Maximum levels can be applied to items in your inventory.  A minimum level is the lowest number of items you need to have on your shelf at any given time.  A highest level is the highest extent of stock you’d like to have on your shelf at any given time.  By setting min/max levels on items, you can be sure you’ll have enough stock to support customer orders, but not too much stock that you have excess inventory.

Let’s take a look at the Item Master Data, Inventory Data tab:

Here are the fields to add least amount and greatest stock levels for inventory, sales or purchased items.

Entering min/max levels is most helpful when combined with the MRP in order to more accurately plan for purchases. However, you can also use min/max levels to set alerts on in style items.  When you set an alert,  the appropriate person will be notified when an item deviates from a minimum stocking level  thus prompting them to place a purchase order for more.

Once you’ve bought into using min/max levels to maintain proper inventory levels, how does SAP Business One lend a hand you to determine what the Min/Max level should be for any particular item? It’s easy…. use the Sales Analysis by Items Report to view sales volume information on each item & you can also use the Purchase Analysis by Items Report to analyze purchase volume for each item.  Then use whatever inventory executive method you desire to determine order point in order to maximize the economic order quantity.