Ecommerce Order Fulfillment
Warehouse Management System (WMS)

What is the inventory master file? Example file

Ngoc Lee
What is the inventory master file? Example file
Share this:

The inventory master file is of great value in helping businesses control the number of imported goods as well as important information in the production and business process. Having an effective inventory master file will help the company have the most detailed view of what they need to do now and in the future to be more successful. 

But not everyone understands the inventory master file definition and the benefits it brings. If you are also facing the same problem then this article is for you.

What is the inventory master file?

Inventory master file definition

An inventory master file is defined as a list that businesses use to contain all the information they need to know about each item they have. The list of total items will include information about materials and finished products. The Item Master List is used for the purpose of recording all the items the business uses and can buy or make when they are used up. 

Thereby, businesses will get the most general view of business reality. This list also makes product management more precise. Every time a customer calls to place an order, the business will know the number of products currently in stock for immediate shipping. This helps to improve customer satisfaction. Most people get annoyed with slow sales and often won't come back. 

👉 Read More: What Is Inventory Accuracy? Formula And Best Practices 

👉 Read More: What Is Excess And Obsolete Inventory? Calculation And Analysis 

Advantages of inventory master file

Master File is currently being viewed as a tool that helps a lot in inventory management. If you have a Master File, businesses will enjoy benefits such as:

  • Master File helps a lot in calculating the amount to invest in each item to achieve the best return.
  • You can also know the market trends thanks to the master file when evaluating the products that are selling best or the items of little interest.
  • Master File will provide businesses with all the important information about their items. This helps to make future production or import decisions.
  • The product management will be more accurate. The workflow of employees in the warehouse is also optimized because they know the exact quantity of goods as well as the current location of each product.
  • When the list of goods in stock is always updated regularly, the response to customers' order needs will be faster. Thereby improving customer satisfaction.

Inventory master file component

Inventory master file component

Because each business will produce different and unique products, the overall product file will also change to suit the nature of each business. But in general, each entry on the main file will have the following important components:

  • name of item
  • item type
  • cost / price
  • location
  • quantity

Inventory master file example

See the example below for a detailed look. This is Company A, a company that sells clothing inspired by Asian cultures. To manage goods more effectively, they have applied Master File in the management process. Their products are shirts and pants with many different designs. So they need a master inventory file to keep track of the materials used in the production of their clothing, as well as the finished products they have in stock. 

By counting those details, business A will know how much raw material they need to produce enough products to meet market demand. This will help with better preparation and also optimize the amount of capital invested in the production.

👉 Read More: What Is The Difference Between Periodic And Perpetual Inventory Systems 

👉 Read More: What Is Centralized Inventory? Benefit And Drawback

The overall inventory record will help Company A get all the necessary information, thereby being able to operate its business better. For company A, they need to know information such as:

  • The item name and item type, whether it's a product item or a supply item.
  • What is the price of the offered item as well as the price of the product item?
  • Item's location and remaining quantity.

This information will be fully available in the item master file. Each entry will be entered in an individual row in the table.

Inventory master file example

For example, for the blue cotton fabric used to make their t-shirts, company A would have this on its main list. Here the company will know the amount of fabric left in the company. Thereby they will assess whether additional input is required. The price of a meter of blue cotton fabric is also statistically priced at $3/m2. 

The blue cotton fabric is stored in the A1 building: where the blue t-shirts are made. When looking up this issue in the inventory master file, the owner of company A will see that they have 10,000m of blue cotton fabric, enough to make about 200 shirts. The price of a shirt is also mentioned in the file, which is $12/piece. 

All finished shirts have been stored in warehouse A2. After reviewing these figures, company A finds that the remaining fabric is still enough to produce enough shirts to supply the market demand. Therefore, they decided to delay the import deadline for a new batch of blue cotton fabric by 1 month. From there, they save a large amount of capital but still ensure profits.


In general, the inventory master file is a list that will give you all the information related to manufacturing materials and finished products. Applying the inventory master file to the business is not difficult now because there is some inventory management software that integrates the ability to provide a perpetual inventory master file. So you should take the time to learn and create a detailed inventory master file to help improve business operations. Hope you have a good time with Efex.

Ngoc LeeNgoc Lee is an Content Creator Manager at EFEX. She wields her long-term expertise in Logistics and Supply Chain, harnessing her top-notch writing and research skills to bring incredibly valuable content. Whether you're a small startup or a well-established enterprise, Ngoc Lee is here to equip you with the essential knowledge of e-commerce, fulfillment, and all things business-related.