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    Key reasons that organisations may need to hold inventories

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    "Identify key reasons that organisations may need to hold inventories. What factors may lead an organisation to change the level of inventories that it holds? How could such a decision affect the other elements of working capital?"

    Provide a good example from a real company with regards to this subject.

    © BrainMass Inc. brainmass.com October 10, 2019, 5:06 am ad1c9bdddf
    https://brainmass.com/business/e-commerce/key-reasons-that-organisations-may-need-to-hold-inventories-492672

    Solution Preview

    When we look at various inventory issues, the main companies we want to look at are companies that have to carry very large amounts of inventory in order to support their basic business operations. This brings us automatically to one of the largest retailers on earth -- Amazon. Amazon must carry enormous amounts of inventory, and their inventory requirements are more complex due to the special programs they have, like holding inventory for their marketplace sellers, if the sellers choose to have Amazon fulfill their customer orders. When we look at Amazon, one of the major things that we'll notice is that they're continually busy, however, during the holidays, and in particular, on black Friday and black Monday, they're HUGELY busy. If you're not familiar with black Friday or black Monday, they're the two days after Thanksgiving Day when people are home starting their Christmas shopping (Friday), and then when people return to work after ...

    Solution Summary

    "Identify key reasons that organisations may need to hold inventories. What factors may lead an organisation to change the level of inventories that it holds? How could such a decision affect the other elements of working capital?"

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