Smoothing Requirements Of Inventory
Sometimes inventory is used to smooth demand requirements in a market where demand is somewhat erratic.
There are three basic reasons for keeping an inventory:
Time – The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amount of inventory to use in this “lead time”
Uncertainty – Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.
Economies of scale – Ideal condition of “one unit at a time at a place where user needs it, when he needs it” principle tends to incur lots of costs in terms of logistics. So Bulk buying, movement and storing brings in economies of scale, thus inventory.
Latest posts by BMS Team (see all)
- Meterdown Annual Festival is back with its 7th edition – Starts today! - January 16, 2020
- Tybms sem 6 results 2019 declared on 19th June 2019 - June 19, 2019
- TYBMS Sem 6 Results 2019 Update from BMS khabri! - June 15, 2019