Inventory Management – VET 240

Vocabulary flashcards summarizing the essential inventory concepts, calculations, and fees discussed in the VET 240 lecture.

Inventory Management

Process of maintaining the right products in the clinic so patient needs are met without letting items expire or tie up excess cash.

Inventory (Clinic Expense)

The second-largest expense in a veterinary clinic and its single greatest revenue producer.

Manufacturer

Company that actually makes a product (e.g., Zoetis manufactures Cerenia).

Distributor

Middle-man that buys from a manufacturer and resells to clinics or retailers (e.g., Patterson Veterinary Supply).

Shrinkage

Loss of inventory through theft, miscount, breakage, or expiration.

Inventory Arrangement

How products are organized on shelves to minimize selection errors and speed retrieval.

Consolidating Inventory

Carrying only a few preferred options in a product category (e.g., three heartworm preventives) to save space and reduce confusion.

Product Turnover Rate

Number of times a product is completely sold and reordered in one year.

High Turnover Rate

Indicates a fast-moving, profitable product; if excessively high, reorder quantity may need to increase.

Low Turnover Rate

Shows a slow-moving item that may need reduced stock or discontinuation.

Pareto Principle (80/20 Rule)

Eighty percent of inventory income typically comes from twenty percent of stocked items.

Reorder Point

Specific on-hand quantity that triggers a new order (e.g., order when six bottles remain).

Reorder Quantity

Number of units purchased once the reorder point is reached (e.g., buy twelve bottles).

Turnover rate

A measurement of how many times inventory is sold or used in a specific period, indicating the efficiency of inventory management. ideal is 12 months

Lead Time

Time between placing an order and receiving the goods.

Minimum Stock Level

Lowest acceptable on-hand amount; often equals the reorder point.

Maximum Stock Level

Greatest quantity kept on hand; equals minimum plus reorder quantity.

Product Markup

Percentage added to unit cost to determine sales price (e.g., 150 % markup).

Break-Even Point

Price that covers all direct costs so the practice neither gains nor loses money.

Dispensing Fee

Flat charge added after markup to cover counting pills, labeling, and vial costs (≈ $12).

Labeling Fee

Additional charge (about 25–30 % of dispensing fee) for preparing items sold in their original containers.

Minimum Prescription Fee

Lowest fee assessed on any prescription transaction, commonly $12.

Hidden Fees

Dispensing, labeling, and minimum prescription fees that are bundled into the final price and not itemized for the client.

Outsourcing Products

Directing clients to the clinic’s integrated online pharmacy, hosted by a veterinary distributor, to fill prescriptions.

Inventory Discrepancies

Differences between recorded and actual stock caused by shrinkage, missed charges, or un-billed in-house use.

Missed Charges

Failure to invoice products or services, leading to lost revenue and contributing to inventory discrepancies.