Relating back to Class 13’s discussion on the importance of inventory, Sharon Silke Carty publishes the article “Chrysler Wrestles with High Levels of Inventory as Unsold Vehicles Sit on Lots” in USA Today on November 2nd, 2006.

Chrysler Logo: Picture Credits

The article reveals that in late 2006, more than three-quarter of Chrysler’s inventory is filled with its 2006 models; whereas, other companies have started producing 2007 models. Silke Carty quotes Chrysler which reveals that it has around 50,000 vehicles sitting in the storage lots unsold. Chrysler’s main problems are that Japanese and Korean cars dominate the automobile market and high gas prices make consumers reluctant to purchase pick-up trucks and big SUVs. Silke Carty also quotes AutoNation’s president Mike Maroone, that Chrysler hasn’t “yet right-sized production with demand” (USA Today). This means that Chrysler is producing vehicles that are not in demand; hence, these unsold vehicles deteriorate in the storage lot, or are forced to be sold at low prices.

This article reinforces the importance of inventory management. If inventory increases and sales do not, then the company will start to lose profits. This situation will continue to worsen until the company begins to produce products that are demanded.

Original Article: “Chrysler High Inventory”