Consignment Inventory
Definition
Stock held by one party but still owned by another until it is sold. The holder records a sale only when the goods are sold on; the owner keeps the inventory on their books until then.
Related Terms in Purchasing & Inventory
Vendor Management
The process of selecting, onboarding, monitoring and paying suppliers to get reliable quality, pricing and delivery. Good vendor management reduces cost and supply risk.
Procure-to-Pay (P2P)
The end-to-end process from requesting and ordering goods to receiving them and paying the supplier. Integrating these steps improves control and spots errors before money leaves the business.
Moving Average Cost
An inventory costing method that recalculates the average unit cost after each purchase, so goods are issued at the latest running average. It smooths cost fluctuations in a perpetual system.
Specific Identification
An inventory method that tracks the actual cost of each individual item, used for high-value or unique goods such as vehicles or jewellery. It gives precise cost matching but is impractical for large volumes.
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