Receive For Order (Rfo) Inventory Management: Benefits And Considerations For Businesses
Receive for Order (RFO) is a strategy in inventory management where businesses receive products only when customer orders are received. Its purpose is to reduce inventory costs and improve efficiency by minimizing the time and resources spent holding and managing excess inventory. Unlike traditional inventory management, RFO relies on a collaborative relationship with suppliers who are responsible for managing inventory levels and shipping products directly to customers. This approach can lead to benefits such as reduced storage costs, increased inventory accuracy, improved cash flow, and enhanced customer satisfaction. However, it also comes with limitations such as potential delays in order fulfillment and increased reliance on supplier reliability.
