Inventory allocation is the process of assigning and managing a specific amount of inventory across various locations in a given distribution network.
Inventory allocation enables a business to track products across its distribution networks, which can be especially beneficial for organizations with complex supply chains.
It’s the process of assigning particular amounts of products to specific locations along the distribution network, such as a warehouse, a physical store, or a distribution center.
In addition to giving a business visibility into their distribution network, inventory allocation allows them to assess better when to send products to the next step in the supply chain, how many products to send, and how to adjust allocations according to changes in the market or consumer demand.
When a business can allocate inventory strategically and effectively via manual tracking or an automated system, it can reduce the risk of stocking out, more swiftly adjust allocations when needed, and save operational time and people power throughout its distribution networks.