I have a computer system with inventory management functions. Why is it that I still can't manage my inventory?

INVENTORY MANAGEMENT SOFTWARE is a tool to use in managing inventory. However, inventory is managed by the people using the software. The reason that people struggle with inventory management, even if they have software, is because they often lack several key success components.

First, they lack the underlying support structure that makes accurate inventory management possible. Second, the software-users are often not trained in the basic principles of inventory management. They can be taught how to push buttons in sequence, but unless they understand inventory management processes, they will not interface with the software effectively. Third, there may be a lack of clearly defined processes in the warehouse. Fourth, companies may lack policies and procedures. Fifth, warehouse access controls may be missing.

Without these elements, even the best software will fail to adequately support the inventory management function.

-Answered by Lynn J. Everard, C.P.C., A.P.P., president, Everard Consulting Services, 6123 N.W. 45th Ave., Coconut Creek, FL 33073; 954/422-9908; fax: 954/570-3321; e-mail: econserve@mindspring.com

How do you calculate market size in a local area?

CALCULATING MARKET SIZE is important if you want to know whether you are increasing or decreasing your share of the local business. One method is to use a per-capita calculation based upon the size of the U.S. market. The U.S. market size is between $8 billion and $12 billion, according to HIDA. So let's use the average figure of $10 billion. You then divide this number by the total population of the U.S. (270 million) and you have an estimated per-capita number. This division yields a per-capita estimate of $37 per person. The next step is to multiply this by the number of people in your area. This is a very rough estimate because senior members (those over 65 years of age) use three to four times the amount of home medical equipment as commercial members (those under 65). Another method is to conduct a survey of your referral sources and ask them the average HME referrals they make per year. Multiply this number by the average revenue per HME category or time, then multiply that times the number of these customers in your area.

-Answered by Alison Cherney, president of Cherney & Associates, 9719 Concord Pass, Brentwood, TN 37027; 615/776-3399; fax: 615/776-3492; e-mail: CherneyAJ@aol.com; Web site: www.cherneyandassociates.com