The only Situations where inventory may be needed:
1. When there is a long distance for products to get to the customer, it may be necessary to have a local warehouse to meet quick turnaround requirements for customers.
2. If customer demand exceeds the capacity of your manufacturing operation.
3. Situations where demand is unpredictable and is genuinely impossible to control or anticipate.
That's it. Just three. All other inventory is EVIL.
And, don't look at these three reasons for inventory to justify having inventory. There is a lot that can be done to reduce inventory even under these circumstance.
Bob Tetu
Business Builder Bob
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Hi Bob .. thanks for telling me about the three reasons for holding inventory .. - it's a waste of money sitting around til that inventory can be used .. when is uncertain ..
ReplyDeleteThanks - Hilary: Be Positive Be Happy