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Inventory must be managed carefully to avoid excess from "summary" of The Goal by Eliyahu M. Goldratt,Jeff Cox
Effective management of inventory plays a crucial role in the overall health of a production system. It is not simply a matter of holding stock; it is about ensuring that the right amount of inventory is available at the right time. Excess inventory can lead to several detrimental effects, including increased holding costs, wasted resources, and ultimately, reduced profitability. Consider the scenario of excess raw materials accumulating in a warehouse. While it may initially seem beneficial to have an abundance of resources, the reality is that each unit of inventory ties up capital that could be better utilized elsewhere in the business. This capital, when locked away in unused products, generates no return. Moreover, the more inventory that is stored, the greater the...
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