(1) Changes in inventory demand, changes in order intervals, and length of delivery delays. It is expected that the greater the change in inventory demand, the greater the amount of safety stock that enterprises should maintain; likewise, under the same conditions of other factors, the greater the uncertainty of order interval and order lead time, or the longer the expected order interval The higher the risk of interruption of inventory, the higher the safety stock should be.
(2) Shortage costs and storage costs of inventory. In general, the higher the probability of occurrence or the likely occurrence of the inventory shortage cost, the greater the amount of safety stock that the enterprise needs to maintain. Increasing the amount of safety stock, while reducing the cost of inventory shortages, will impose an additional burden on storage costs for the business. Under ideal conditions, the optimal ordering and storage mode can be obtained, but in the actual operation process, the ordering cost and the storage cost are reversed, and the risk caused by the uncertainty makes the problem arising from the circulation of the commodity. Has not been effectively resolved.
In general, vendors have to deal with two streams: logistics and information flow. The internal barriers of the company affect the effective circulation of information. The batch processing of information makes the “acceleration principle†of the company effective, and the demand information is often distorted or delayed, which causes typical response of procurement personnel and production planners – “Before Time or safety stock syndrome." This effect continues to increase until the excess is increased and the corresponding costs increase.
Excess production capacity continues to spread throughout the supply chain, and distorted demand data is beginning to cause the second effect – “inventory reduction syndromeâ€, where manufacturers have to choose to lower the sales price of products and erode corporate profits. The former effect causes excessive inventory, and the company will continue to exist and push each other in order to find the way and lead to the latter result without process change.
In the market growth period, the consequences of the combination of the two effects are often overshadowed by the growing demand, manufacturers can survive or even prosper without regard to the existence of the shock cycle - for a period of time, fully manage inventory; Accelerated production regardless of cost. When the market entered a period of steady development or decline, manufacturers began to decline step by step. It can be said that in the current situation where there is a gap between the enterprise and the enterprise, and even there is a gap between the internal departments, the information transmission lag, slow response, batch processing and uncertainty are the underlying causes of the above two effects. It also reduces tissue stagnation, enhances information grooming, and responds quickly.
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