Why do we need to hold stock?
Buffer in the supply chain or manufacturing process
Satisfy demand – can be erratic
Buy low sell high – precious metals, oil, coffee etc.
Shortage or unreliability in supply
Cope with peak demand – seasonality
Maintenance parts
Quality control cover
Customer and supplier lead times
Sub assembly
Holding stock in numerous locations
Ability to increase production runs
Humanitarian storage
Archive storage
Smooth the flow of goods
Packaging material
Store returns
Promotions and Product launch
Cover for production shutdowns
Lower unit cost if bought in large quantities and if transported in large quantities
Production breakdown
Ripening products, cheese, meats, whiskies
Delay taxation payments