True. Reduction of inventory on hand can decrease inventory carrying costs and increase inventory turnover and improve inventory ratios, signaling efficiency to outside analysts which can increase shareholder value. But it's important to realize that another SCM goal includes
Managing the risk of stock-outs. There is a tradeoff. But ceteris paribus the less inventory you have on hand while still maintaining enough to meet consumer demand the better the results.
Managing the risk of stock-outs. There is a tradeoff. But ceteris paribus the less inventory you have on hand while still maintaining enough to meet consumer demand the better the results.
