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Why in times of crisis, a manager must reduce as much as possible, inventories and ongoing?

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Question added by Nadjib RABAHI , Freelancer , My own account
Date Posted: 2016/07/22
Emely Alop
by Emely Alop , Senior Accountant , Joint Venture Itinera Spa and Ghantoot Transport & Gen. Contg. LLC

Managing excess and obsolete inventory remains a major challenge in most global supply chains.

The best way to manage excess and obsolete inventory is through preventive and avoidance improvement strategies.

Omar Sharif
by Omar Sharif , Customer services Officer , Totals Co

this is not must approch , it depends on company business , in some business increasing inventory will lead to very high profit if business and inventory is related to material/products used in crises :)

Jagjeet Singh Vilkhu
by Jagjeet Singh Vilkhu , Sales And Business Development Manager , Finance House pjsc

It can help management to flow easily from crisis situation without increasing more market debts.

Imran Ali Dogar
by Imran Ali Dogar , Executive (Finance & Accounts) , Attock Petroleum Limited

1. In crises funds must be kept in most liquid form, therefore maximum inventory should be liquidated to absorb the shocks or recession through stream flow of funds.

2. In case of closure of a business, inventories held pose a major hindrance in recovering the maximum value from the liquidated assets of the company

 

Arafat Al Reyashi
by Arafat Al Reyashi , Business Development Executive / Manager , Royal Image

because it will effect on all employees, & reducing the positive work

Ghulam Mustafa
by Ghulam Mustafa , Inventory Controller , Mahmoodgroup of Industries

Say if your gate and weight is controlled than  no doubt u face the crisis. But during the crisis should be adopted

  1. Purchase requisition should be controlled, and major roll played by production and maintenance staff, periodically maintenance and usage of goods at optimum level.
  2. Reduces the inventory levels by stock management,
  3. Than purchase management strictly comply to reduce the purchase.  only should be purchased compulsory operational material. 
  4. Purchase comparative statements be followed.

Strategy of Playing Safe-During Supply Chain crisis there are many factors that could affect our Overall profit in an Organization. This entire concept depend upon Demand and supply. If the Demand is very less and supply is very large, then it is very Important for the manager to maintain low levels of stock(in some cases re-order time is very large with low demand) at such times current profit is good when compared to new risky profits (It is a kind of strategy). It is very Important for managers to select specific kind of System("P" system or "Q" system), Personally I felt Q system is considered as playing safe.

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