Question

actually a question was raised during class in my quantitative methods class...

for the important of inventory control

irregular supply and demand

and under that ( inventory used to buffer the variability)

I want you to elaborate on that phrase.

Answer 1

When the supply or demand for an inventory item is irregular, storing certain amounts inventory can be important.

For Ex.

If the greatest demand for XYZ beverage is during thesummer, the XYZ company will have to make sure there is enough supply to meetthis irregular demand. This might require that the company produce more of the soft drinking the winter than is actually needed in order to meet the winter demand. The inventory levels of XYZ will gradually build up over the winter, but this inventory will be surplus in the summer. The same is true for irregular supplies.

Another important function of inventory is to avoid shortages or stockouts. If a company isrepeatedly out of stock, customers are likely to go elsewhere to satisfy their needs. Lostgoodwill can be an expensive price to pay for not having the right item at the right time.