Glossary

Plain-language definitions of inventory and purchasing terms.

• Inventory turnoverHow many times you sell through your average stock in a period.
• Lead timeDays from placing a purchase order to the stock being ready to sell.
• MOQThe smallest amount a supplier will sell you in one order (minimum order quantity).
• Purchase orderA document a buyer sends a supplier to order goods, listing what, how many, at what price and when.
• Safety stockExtra inventory held to cover demand spikes and supplier delays.
• StockoutWhen an item you sell is unavailable because you have no stock left to sell.