Reasons for Holding Stock

  • To provide a buffer between supply and demand.
  • To take advantage of quantity discounts.
  • To account for seasonal fluctuation in price, supply and demand.
  • To help the production and distribution operations run more smoothly.
  • To minimize production delays caused by lack of spare parts.
  • To provide a variety of materials from which the customer can select.
  • Some materials appreciate in value with long storage
  • To accommodate variation in demand.

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