sadfsaf

. ROLE OF INVENTORY

Inventory has many roles for an organization.  Let's take a supermarket chain. Most supermarkets in the US have weekly sales.  The main goal is to increase the foot traffic into the store.  They may or may not make a profit on the sale item.  The sales last one week.  The inventory requirement is to have the correct amount on hand for the entire week but not have any left over. 

So this is what happens:

The 1st time a customer wants to buy an item on sale and it is out of stock, about 50% buy a substitute item in the store, the other 50% request a rain check.

The 2nd time it happens, about 33% buy a substitute item, 30% buy the item at another store, 10% request a rain check, the remainder walk out for good.

The 3rd time it happens, they do not buy anything, they walk out for good.

So the forecast has to be accurate.  Too little, lost sales and maybe lost customers.  Too much 2 things happen, a) they put the item on the shelf at full price (that is a good thing), b) way too much and you end up selling it a a discount to a low price store chain like Ocean State Job Lot.

Do you have any examples of where "too many" of "too little" have occurred?