What is the function of 'stock levels' in inventory management?

The function of 'stock levels' in inventory management primarily relates to the tracking of the amount of inventory available at any given point in time. This crucial information aids in guiding reorder practices to ensure that stock is maintained at sufficient levels to meet demand without overstocking. By monitoring current stock levels, businesses can make informed decisions about when and how much product to reorder, preventing both stockouts and unnecessary excess inventory.

This approach helps maintain an efficient inventory system, ensuring that the supply aligns closely with sales patterns and customer demand. It provides a clear snapshot of inventory status, which is essential for effective supply chain management. Ultimately, accurate visibility of stock levels reduces costs, optimizes storage space, and enhances overall operational efficiency.