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Inventory Levels Challenged Already

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Jay_Bond
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Supply Network Guru
re:
Jay_Bond   7/7/2011 7:15:05 AM
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Inventory levels seem to be an issue in many market segments. Where do you draw the line and have too much inventory that hurts the bottom line? I agree with your comment about how inventory levels are being viewed. I think they should be based on companies needs and sales and not be driven by financial motives. Companies that are doing well financially but don't have the required inventory to meet demand will face financial issues when their sales aren't met.

Jacob
User Rank
Supply Network Guru
Investment cost and profit
Jacob   7/7/2011 3:44:12 AM
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Barbara, you are right. After the recent happenings in Japan, most of the companies or vendors are over concerned about supply issues. That means over buffering products, which is causing an overloaded responsibility. The excessively accumulating parts can cause capital damage, which is increasing the investment cost and hence blocking the profit from that investment up to a certain period. Most of the companies are diverting the developmental cost for such activities, and hence reflecting a corresponding drop in their profits.



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