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Inventory costs

The flashcard is about Inventory Costs in supply chain management. It defines Inventory Costs as costs related to storing and maintaining inventory over a certain period, typically described as a percentage of the inventory value. It cites skyrocketing credit costs and the potential for costs to go through the roof as concerns. It also talks about the costs of a static inventory, focusing on ownership rather than inventory movement, warning that without promotion, inventory costs will explode due to write-offs. The flashcard implies that most companies tend to underestimate inventory costs as they do not analyze nonlinear constraints in supply chains. The image portion of the flashcard depicts a man in a coat marking a stack of goods as scrap due to expired best-before dates, suggesting a lack of efficient inventory management and the financial loss associated with unsold or expired products. The bottom line suggests that underestimating inventory costs is a common oversight in supply chain management.

Artist: Marina Besfamilnaya

Learn more from the entry Inventory costs of the Lokad knowledgebase.