Inventory glossary
Stock and inventory terms explained in plain words, from SKU and FIFO to safety stock and ABC analysis.
- ABC analysisSorting items into A, B and C by how much they bring in, to give most attention to the few that matter most.
- Batch numberAnother name for a lot number, most used for the units made in one production run.
- Cost of goods sold (COGS)What the goods you sold cost you to buy or make, the figure taken from sales to get gross profit.
- Cycle countCounting a small part of the stock on a schedule instead of everything at once, so all of it gets checked without closing.
- Dead stockStock that hasn't sold for a long time and probably won't at its normal price.
- Economic order quantity (EOQ)The order size that keeps the cost of ordering plus the cost of holding stock as low as possible for an item.
- FEFO (first expired, first out)Selling or using first the stock that expires first, whatever order it arrived in.
- FIFO (first in, first out)Selling or using the oldest stock first; in accounting, costing each sale at the price of the oldest units.
- GTIN (EAN and UPC barcode number)The worldwide product number under a retail barcode: EAN-13 in most countries, UPC-A in North America, given out by GS1.
- IMEIThe 15-digit number that identifies one mobile phone, its serial number on mobile networks.
- Lot numberA code shared by units made or received together, so a whole batch can be found, followed and recalled.
- Reorder pointThe stock level at which you order again, so the delivery arrives before you run out: sales during the wait plus safety stock.
- Safety stockStock kept on top of what you expect to sell while you wait for a delivery, to cover busy days and late suppliers.
- Serial numberA code unique to one unit, so it can be told apart from every other unit of the same product.
- ShrinkageStock lost between buying and selling: theft, damage, expiry, and mistakes in counting or recording.
- SKU (stock keeping unit)A code a business gives each product it stocks, one for every version (size, colour) it counts separately.
