Aggregate Inventory

TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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CIOP sessions are conducted by a pool of faculties who also offer the other international certification programs. The typical faculties are having experience between 20 to 30 years in the domains of procurement and supply chain and have a wealth of industry and teaching experience. All of them have great passion for teaching and believes in continuous learning and sharing those learnings. The faculties also go through periodic trainings titled “Faculty Development Programs” to keep them abreast with the latest developments in supply chain and teaching methodologies. Basically, all the faculties are practitioners or consultants who work for the industry and teach supply chain during their spare time or execute this as a project.


Definition of Aggregate Inventory: The collective volume of all items included in a single physical storage location. These items may include raw materials, finished products and components, including transportation equipment and office furniture. Also known as total stock. This concept can be very useful in determining the correct quantity of physical storage required for a specific period of time. This will then dictate the most economically sound method of warehousing to be utilized.

Aggregates, as defined by Halliday and Hassan (1990), are the "total volume of physical storage that will be needed for a specific period of time to store the quantity of merchandise intended to be handled during the period". In other words, Aggregate Inventory is a measurement of the stock required to support the expected replenishment of finished goods and raw materials. If a company buys raw materials or finished products in large quantities and sells these same items to customers in smaller quantities, then the company would have to keep an adequate level of inventory on hand to meet both the replenishment and the sale demands of its customers. It would be impossible to sell all the goods to all of its customers on the same day. A warehouse which holds hundreds of thousands of inventory items, regardless of its size, would be required.

In addition to the stock level required to meet demand, companies must also determine the amount of inventory that they can afford to maintain on hand at any one time. A company's inventory policy must take this into consideration when determining the size of its stockroom. The type of goods to be stored and the number of sales opportunities available dictate this requirement. Many companies choose to maintain an inventory, which consists mainly of raw materials, finished goods and office supplies. In an economic climate where customers demand goods on short notice, companies are required to keep raw materials on hand and finished products on hand in order to meet their demands; short term funding is often required in order to keep operations going and meet payrolls.

Certified Inventory Optimization Professional 

CIOP is an end-to-end supply chain certification that contains 30 modules such as Introduction to Supply Chain Management, All About Inventory, Production Planning System, Strategic Business Planning, Sales & Operations Planning, Master Scheduling, Material Requirements Planning, Demand Management, Capacity Management, Forecasting, Production Activity Control, Procurement, Order Quantities, Independent Demand Ordering Systems, Warehouse Management, Transportation Management, Supplier Relationship Management (SRM), Customer Relationship Management (CRM), Introduction to Quality, Introduction to Packaging, Introduction to Process, Lean, Six Sigma, Total Quality Management, Theory of Constraints, Supply Chain Technologies, Supply Chain Techniques, Industry 4.0, International Standards and Supply Chain Risk, Safety and Security. 

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CIOP Knowledge Series

One-Minute Supply Chain Facts

The most recent video is available here. To access the past videos in the One-Minute Supply Chain Facts Series, please click the playlist icon located on the Top-Right of the video.





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