Plain definitions of the terms that appear in store operations, each with the calculation, a worked example and the mistake people make.
Operations vocabulary is mostly borrowed from warehousing and supply chain, where the terms have precise meanings and rather more infrastructure behind them than a six-person store has. That gap is where the confusion lives: the word is used correctly, and it means something the person using it cannot actually do.
Each entry gives the definition first, in one paragraph, then the calculation where there is one, then a worked example. The worked examples use invented numbers chosen to make the arithmetic clear. They are illustrations, not findings, and nothing here should be quoted as research.
The stock level at which you place the next order, derived from how fast it sells and how long it takes to arrive.
The buffer you hold for the times demand runs hot or the delivery runs late.
How many days your current stock will last at the rate it is actually selling.
The share of the stock you received that you actually sold in a given period.
Running out of something a customer wanted to buy, at the moment they wanted to buy it.
An order accepted for something you do not currently have, to be shipped when it arrives.
Stock that has stopped selling and is quietly costing you money to keep.
How many times you sell and replace your average stock in a year.
What it costs you per year to keep stock sitting on a shelf.
The smallest quantity a supplier will sell you in one order.
The full cost of getting a unit onto your shelf, not just what the supplier charged.
How much you can still spend on stock this period without over-committing.
The elapsed time from deciding to order to the stock being sellable, which is longer than any supplier quotes.
A third-party logistics provider: a company that holds your stock and ships your orders for you.
Counting a few stock lines regularly rather than counting everything twice a year.
The gap between the stock your records say you have and the stock actually there.
The unique code identifying one specific sellable variant of a product.
Selecting the items for an order and packing them for despatch.
How long it takes you to get an order from paid to despatched.
Sending one order as more than one parcel, usually because part of it is not ready.
The reference that authorises a return and links the parcel coming back to the order that went out.
The share of what you sold that came back.
A written commitment to do something within a stated time, with a consequence if you do not.
A way of writing down who does the work, who owns the outcome, who gets asked and who gets told.
The written route a problem takes when the person who found it cannot resolve it alone.
A written procedure for a task that recurs, short enough that somebody actually opens it.