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But the cost of buying and holding inventory goes up. If a store has 10k shoes in inventory @ $50/each, they are carrying $500,000 in inventory. If the shoes
by Vvector 1y ago
But the cost of buying and holding inventory goes up. If a store has 10k shoes in inventory @ $50/each, they are carrying $500,000 in inventory. If the shoes now cost $75, they need $250k more for inventory. Capital for inventory isn't free.
- anthony_d 1y agoThe need for inventory decreases at the same rate as the sales throughout, e.g. if it takes twice as long to sell a pair of shoes than you only need to hold half as many.