Just how does Amazon do it? Like...14 billion boxes shipped all over Creation. In short: inventory management.
Inventory management is the act of ordering, organizing, storing, and shipping the inventory to be sold.
If you were renting out a warehouse to story inventory, you’d only want to rent as big of a place as you’d need and not much bigger—or else you’re wasting money. But you also don’t want to rent a place so small that you risk not being able to keep enough inventory on hand to keep up with demand influxes.
Balancing fixed warehousing costs, variable inventory-moving costs, timing, seasonal changes, organization, and inventory needs (fragile? large? refrigeration required?) are all involved in inventory management. If you’re an inventory manager, you’re either running a tight ship...or a madhouse.
Related or Semi-related Video
Finance: What is inventory?2 Views
Finance allah shmoop What is inventory Well it's Just stuff
you have for sale in one form or another An
auto dealer Well all those cars she has sitting out
there in the sun is a dive bombing targets for
the birds Yeah while their inventory to the car dealership
the cars are inventory the loads of nose hair trimmers
sitting on the shelves at the well appointed nostril fine
store best nostril trimming store in the world Yet their
inventory albeit kind of gross ish inventory especially after use
the four thousand yards of denim cloth sitting in the
weaving factory waiting for thirteen year old girls in thailand
toe weave it all together to make levi's for the
gap Yep that cloth is inventory It isn't finished inventory
It's just a work in process not yet ready for
prime time or a prime thigh or whatever But it's
an asset for the company who owns it and it
is held as inventory on the balance sheet Work in
process right there at the balance sheet right there Okay
And when that inventory is sold and turned into revenues
it'll just become part of the expenses line on the
income statement usually has cost of goods sold or caw
Gse that's What people in the accounting bids say Cocks
thie Inventory is a good but inventory is always good
Of course as many a customer has learned after taking
a hefty shock straight to the hunger And that hurts
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Work-in-process inventory is just inventory... that is in the process of being built. In other words, it accounts for the inventory's asset value.