Saturday, November 3, 2012

Why should inventory be controlled? Explain

The previous thoughts were accurate.  Inventory has to be
controlled if self preservation of the business is of vital interest.  Operating costs
swell and profits dwindle if inventory is a "runaway train" that cannot be controlled.
 The very idea that the essence of a business' profit center, inventory, is not
controlled simply means that the business will not be in operation for long. I think
that the challenge is for businesses to control inventory, but also understand that
there will be some level of imprecision in the process.  Inventory cannot be exactly
perfect all the time.  As businesses expand and grow, some "spillage" of inventory is
going to be inevitable.  Products might be damaged in production or distribution phases,
or it might be more productive to engage in a free distribution of inventory as a "trial
phase" with the hope to generate a larger consumer base in the future.  Some loss is
going to happen, but as long as there is a very cogent idea of how the inventory is to
be managed, this can be sustained.

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