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Identify key reasons organizations need to hold inventory

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Identify key reasons that organizations may need to hold inventories. What factors may lead an organization to change the level of inventories that it holds? How could such a decision affect the other elements of working capital?You should choose examples from your own experience or find appropriate cases on the Web that you can discuss.

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Your tutorial is 332 words and discusses the issues surrounding holding inventory from a picture frame manufacturer's viewpoint.

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When I was working for a picture frame manufacturing company, the key reasons to hold inventory were either insurance against disruption in obtaining more items or anticipated sales.

Some of the frames were made of unique hardwoods that we sourced from the far east and so it took six weeks on the boat to get new supplies. And then the wood needed to dry out and "settle" to the moisture and heat conditions of the new location before cutting into frames. So, we held inventory due to the long ...

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