Managing the inventory of a business is an important. Having insufficient inventory on hand can often result in lost sales and dissatisfied customers. But having too much inventory on hand can be financially strenuous as your available cash is tied up in product that sits in your warehouse. Businesses that successfully manage their inventory keep enough on hand to satisfy demand and replenish that inventory just as their supply is running out. Businesses that are seasonal in nature or that have fluctuating demand keep a 'safety stock' on hand to make sure they can accommodate unanticipated need.

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