1 .Importance
■If inventory is too high;
Inefficient → profit reduced
■If inventory is too low;
Insufficient to satisfy customers → profit reduced.
2. Reasons for Holding Inventory
■To meet demand by acting as a buffer in times of unusually
high consumption (i.e. to reduce the risk of "stock-outs").
■To ensure continuous production.
■To take advantage of quantity discounts.
■To buy in ahead of an expected shortage or ahead of an expected price rise.
■For technical reasons (e.g. maturing whiskey in casks or keeping oil in pipelines).
■To reduce ordering costs.
3 .Inventory Costs
■ Purchase price
■ Holding costs:
cost of capital tied up;
insurance;
deterioration, obsolescence and theft;
warehousing; and/or
stores administration.
■ Re-order costs:
transport costs;
clerical and administrative expenses; and/or
batch set-up costs for goods produced internally.
■Shortage costs:
production stoppages caused by lack of raw materials;
stock-out costs for finished goods—anything from a delayed
sale to a lost customer; and/or
emergency re-order costs.
■ Systems costs—people and computers.
，我們將會(huì)及時(shí)處理。