I found the class on inventory fairly interesting and a little confusing. I found an article that articulated what causes excess inventory and why it is a hindrance to companies. The articles eight main causes of excess inventory were:
1) Loss of sales fear
2) Price deals
3) Write-offs
4) Lack of measures
5) Limited inventory planning
6) Supplier performance
7) No process
8) One approach fits all
A few of these causes surprised me. Firstly, I thought that making sure a company always had enough of the product to keep up with demand was a good thing but here it is described in number one as a fear. To go along with number one sometimes the businesses forecasts are too optimistic and by ordering the amount to keep the expected demand fulfilled they are actually acquiring excess inventory. I was also unaware that the unreliability of suppliers and their performance aid in creating excess inventory. This article enlightened me to the fact that excess inventory is not just about a company ordering more than they actually end up selling, there are some key factors that contribute to inventory piling up.
