What is the definition of Ideal Inventory?
Ideal Inventory is a theoretical inventory level and assumes 2 premises: (1) that all “Surplus” inventory will be eliminated, and (2) that a pharmacy will use all of Datarithm’s calculated reorder points. As both of these premises are either unattainable (1) or undesirable (2), Ideal Inventory theoretical and unattainable.
Rationale:
- Because eliminating all Surplus is highly unlikely because items may not be returnable and/or transfers are not recommended or possible [1 store operation]), Ideal Inventory is UNDERSTATED.
- Because stocking of highly expensive items is very undesirable, pharmacies choose to replenish only when refill dates approach, NOT when On Hands drop below reorder points. Thus they would not want Datarithm’s positive, usage-based replenishment points. As such, Ideal Inventory is OVERSTATED.
Contact Datarithm Support for discussion.
