What does SKU stand for in inventory management?

SKU stands for Stock Keeping Unit, which is a unique identifier used to track inventory in warehouses and retail settings. Each SKU corresponds to a specific product and its variations, such as size, color, or style. This identifier helps businesses manage their inventory efficiently by allowing them to monitor stock levels, analyze sales patterns, and quickly locate products within their storage systems.

The use of SKUs is essential for effective inventory management because it enables retailers and wholesalers to organize, categorize, and track products more easily. By assigning a distinct SKU to each product, companies can streamline their operations, optimize their stock levels to meet demand, and reduce the risk of overstocking or stockouts. Understanding the concept of SKUs is crucial for anyone involved in inventory management, as it directly impacts a business's operational efficiency and profitability.