Glossary

Optimal Stock refers to the inventory levels that balance minimising costs and maximising profitability for a company. Optimal stock ensures a company has enough inventory to meet customer demand without incurring unnecessary costs associated with holding excess inventory or experiencing stockouts. The optimal stock level depends on the company’s sales volume, lead times, order quantity, and customer demand patterns. A company can reduce its storage costs, minimise inventory write-offs, and improve profitability by maintaining optimal inventory level.