Supply Chain

Inventory Aging

Stock ages on a ledger whether you read it or not: storage accrues, decay clocks run, and recovery value falls monotonically while owners wait for full price.

  • Beginner
  • 6 min total
  • 10 chapters

What decision this helps you make: Your aging buckets, the pre-written action thresholds per bucket, and which SKU's deep-bucket units are an ordering post-mortem waiting to be read.

What this topic is

Inventory aging is the time-on-hand ledger: stock bucketed by age, each bucket billing storage, entombed capital, and decay. It is managed by monthly review, pre-written action thresholds (promote → markdown → rescue → liquidate), and upstream post-mortems on what aged.

Why it matters

Aging is where the MOQ bets and forecast hopes come home: recovery value falls monotonically while sunk-cost instinct waits for full price, and some channels turn drift into cliff with long-term storage surcharges. The first markdown is almost always the cheapest.

Who should learn it

Anyone holding stock. The aging report is the balance sheet's honesty layer.

What you will understand

  • The buckets and their bills: storage, entombed capital, decay clocks
  • Why recovery falls monotonically, and why the first markdown is cheapest
  • Pre-written thresholds: promote, markdown, rescue, liquidate, all decided in calm weather
  • The upstream post-mortem: every deep-bucket SKU names an ordering input

Prerequisites

Common misconception

"It's not losing money sitting there. It's stock, it's an asset." The books say so (inventory at cost); the ledger disagrees: storage bills monthly (punitively past channel thresholds), the cash inside can't fund the reorder of what actually sells, and the recoverable value falls with every bucket as seasons close and trends cool. The loss happened when demand didn't show. The markdown just schedules the honesty, and scheduling it early is what keeps it small.