Inventory management glossary

SKU (stock keeping unit): an internal code used to distinguish an item or variant. Barcode: a machine-readable representation of a code used to look up a record. Item record: the digital profile containing an item’s identity, quantities, locations, media, and operational details.

Unit of measure: the quantity basis used for an item, such as units, boxes, kilograms, or litres. Variant: a distinct version of a product, often separated by size, colour, configuration, or pack quantity.

Minimum stock: the level at which an item needs attention. Target stock: the preferred quantity after replenishment. Reorder point: the stock level that triggers a purchasing decision based on expected usage and lead time.

Safety stock: extra inventory held to reduce the risk of a shortage. Lead time: the time between starting a purchase and having usable stock available. Stockout: a situation where required inventory is unavailable.

Cycle count: a scheduled count of selected inventory rather than a complete count of every item. Receiving: checking and recording incoming stock. Stock transfer: a recorded movement of inventory from one location to another.

Quantity adjustment: a correction made when the recorded amount differs from the verified amount. Purchase order: an internal or external record of items requested from a vendor. Inventory valuation: the calculated financial value of stock on hand.