A company should hold a trillion units of inventory! Do you agree with that? What does the law of supply tell us?
One of the laws of supply of goods to a market is that companies hold enough inventory to satisfy customer demand, without holding too much. So intuitively, just the right quantities of stock to satisfy demand will minimise cost. However, when dealing with thousands of SKU's the art of balancing demand with supply is intricate. It becomes even more complex when multiple storage facilities are used, and customer service times are short and/or varied according to criticality of products.
One of the laws of supply of goods to a market is that companies hold enough inventory to satisfy customer demand, without holding too much. So intuitively, just the right quantities of stock to satisfy demand will minimise cost. However, when dealing with thousands of SKU's the art of balancing demand with supply is intricate. It becomes even more complex when multiple storage facilities are used, and customer service times are short and/or varied according to criticality of products.
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