Better Planners make Better Plans.
Inventory is a buffer against uncertainty. A common image that I first came across when studying Goldratt’s Theory of constraints (which I highly recommend by the way), is that of a ship sailing on a lake. The ship represents the company and the water inventory. Below the water are rocks representing problems in the company. …
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The major challenge in planning is finding the balance between supply and demand. An imbalance between the two will have a serious impact on the efficient and profitable running of the business. Too much supply (above and beyond the planned and targeted level set for valid business reasons) will result in: Building excess inventory which will…
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