Slow-moving inventory
In one sentenceItems that stay in the warehouse for a long time without being sold, or sell very slowly, tying up money, taking up space and exposing them to damage or obsolescence.
Simply put
Slow-moving inventory is money asleep on the shelves: you paid for it and it has not come back to you. You define it by a period you choose, such as an item not sold for six months or one that covers a full year of sales.
The remedies: clearance offers, returning it to the supplier if possible, or moving it to a branch that sells it faster, and then stopping reordering it.
Worked example
An electrical tools store has 400 pieces of an item at a cost of 50 SAR per piece, last sold 9 months ago.
Quantity400 pieces
Cost per piece50 SAR
Last sale9 months ago
Money tied up = 400 × 5020,000 SAR
Don't confuse it with
Inventory obsolescenceSlow-moving stock may still sell later at its price, while obsolete stock has lost part of its value and will only sell at a loss.