Excess inventory has pros and cons depending on a variety of factors. Sometimes, a reserve stock of parts on hand is needed because the cost of not having a part immediately is too high.
Inventory has costs. It costs money to store, secure, and account for the parts. It has hidden costs as well. For example, the excess parts cost money to manufacture, repair, or buy. That money could have been used for making different parts that may be needed more.
Excess inventory may become obsolete or degraded. Some parts require temperature controls, which is costly, or expiration dates such as chemicals or rubber.
In this short video, I will describe some of the ways to forecast a proper amount of parts based on “programs” and historical “usage.”
Equipment Specialist Excess Inventory Demand Forecasting. How to ace an interview for the 1670 job series Equipment Specialist. Demand Forecasting example.
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