Question 1

Is reorder point a fixed number? I've been using the same figure all year.

Accepted Answer

This is the most common inventory mistake. Reorder point depends on lead time (delivery time from suppliers) and average consumption — both change seasonally and with market fluctuations. The guide shows how to build a dynamic reorder point formula in Excel that automatically updates when lead time or demand changes.

Question 2

What is EOQ and why is it better than ordering by gut feel?

Accepted Answer

EOQ (Economic Order Quantity) finds the balance between holding costs (expensive if you order too much) and ordering costs (expensive if you order too frequently). The formula is EOQ = √(2DS/H), where D is annual demand, S is cost per order, and H is annual holding cost per unit. The guide includes an EOQ template per SKU with sensitivity analysis.

Question 3

What is ABC inventory analysis? Is it the same as ABC analysis in accounting?

Accepted Answer

Completely different. ABC inventory analysis classifies SKUs by consumption value: Group A (20% of SKUs, 80% of value) needs the closest monitoring; Group B is middle; Group C (50% of SKUs, 5% of value) can be managed more loosely. Combined with dead stock analysis, you identify which SKUs are tying up capital without selling — so you can liquidate at the right time.

Question 4

When should I use Power Query for supply chain management instead of regular VLOOKUP?

Accepted Answer

Use Power Query when data comes from multiple sources: supplier reports, warehouse systems, and marketplace orders all in different formats. Power Query merges and standardizes everything automatically on each refresh — no more weekly copy-paste. With plain VLOOKUP, adding a new supplier or changing a source file structure means rebuilding from scratch.

Question 5

What is a good inventory turnover ratio? How do I interpret it?

Accepted Answer

There's no universal benchmark — fresh food may need 50–100 turns per year, while industrial machinery might be 2–4. More important is comparing your turnover year-over-year and against competitors in the same industry. The guide shows how to calculate both inventory turnover and DIO (Days Inventory Outstanding) together for fuller context.

Question 6

How do automatic alerts for inventory work in Excel?

Accepted Answer

Use Conditional Formatting combined with formulas to auto-color rows: red when stock falls below reorder point, yellow approaching the threshold, green when safe. You can also use IF + TEXT to create a status column ('ORDER NOW', 'RUNNING LOW', 'OK') that anyone can read at a glance — no formula knowledge required.

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