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In the research of industry economy, by observing the inventory status and the reasons for its changePeriodic change, analyze industrymarket environmentAnd prosperity, a cosine curve cycle of inventory from falling to increasing and then falling is called inventory cycle.
This allows simple shipment scheduling applicationsYou can also calculate the safety stock and the best purchase replenishment time
However, some people say that the inventory cycle refers to the number of sales/inventory cycles of the company,
The higher the number of times, the faster the inventory turnover of the company, and the lower the inventory level, the greater the business needs
Basic concepts
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For strongCyclical industryIn terms of production capacitycontinuous production And it takes a long time to increase the capacity, while the demand hasSeasonality, intermittentHysteresis, inertia, etcVolatilityTherefore, the contradiction between the continuity and stability of inventory formation and demand volatility determines that its producer inventory will show the characteristics of high and low fluctuation cycles. A complete cycle is called an inventory cycle.There is no unified conclusion on inventory cycle division. According to its theoretical background, demand (consumption) is generally rising. Starting from consumption amplification, the inventory cycle can be roughly divided into four stages:
Inventory clearing stage
Assume that there is supply and demand at this timeEquilibrium point(1) , price, inventorySupply capacityAnd demand as a starting point.becausesocial developmentThe demand is enlarged, and the demand first breaks through the equilibrium point (1). The inventory is lower than the normal inventory of the industry, which indicates that the product has been in short supply.Potential consumersWorried about rising prices and insufficient supply, they will join in the ranks of increasing procurement, increasing demand, rising prices and decreasing inventories.The characteristics of the inventory clearing stage are that the inventory is lower than the normal inventory, the demand increases, and the price rises, forming a common price rise expectation.
becauseproduct priceFurther increase leads to gradual increase in capacity supply, while high prices restrainconsumer demandAs a result, rational consumers began to consume the products they had reserved in the earlier stage and reduce new purchases. The situation of demand exceeding supply began to change. Prices gradually peaked, inventories began to rise from the lowest point, and inventories moved closer to the equilibrium point (1).
Inventory increase stage
Due to the rigidity of supply, the newly added capacity and the original capacity are continuously forming inventory, while the consumer demand continues to slow down due to the expected increase in supply, price decline and other volatile reasons (such as low consumption season). Supply exceeds demand, and inventory continues to rise.At this point, the inventory is higher than the equilibrium point (1), and the price begins to decline and is lower than the equilibrium point (1).The characteristics of the inventory increase stage are: the inventory exceeds the normal turnover inventory of the industry and continues to rise, the price continues to fall, and at the end of the period, some production capacity starts to reduce voluntarily;At the same time, consumers' own inventory is decreasing and demand potential is gradually forming.
De stocking stage
When the producer's inventory increases beyond his ability to bear, and the profit situation begins to deteriorate, production will be reduced by a large marginon sale , or even part of the production capacity is withdrawn from the market, and the overall supply is actively reduced.At this time, the speed of supply increase decreases, the supply speed is less than the speed of consumer consumption, and the inventory reaches the highest point and starts to decline slowly.From the perspective of demand, the overall demand is growing, and the price will also increase the potential purchase demand due to the rapid decline of de stocking pressure.In this case, the supply capacity will be reduced to a level lower than the normal consumption demand of consumers, the inventory will gradually decline, and the price will slowly rise.Some rational consumers will expect the producer's inventory to decline and the price to bottom out, so they will increasePurchase volume, thus accelerating the decline of inventory. The decline of inventory will drive the price to rise, further promoting potential consumers to buy at low prices.The characteristics of the de stocking stage are as follows: the producer's inventory continues to decline from the highest level (transferred to the consumer's inventory), the product price drops sharply at first, and then continues to rise slowly, and the inventory and price are close to the new equilibrium point (2).
New round of inventory clearing
When the price and inventory reach a new equilibrium point (2), a new inventory cycle begins to brew.Generally speaking, due toSupply and demandRebalancing is a dynamic process. Both the expected price and the actual purchase have hysteresis and inertia, and the release of new capacity is difficult to exit. Therefore, the equilibrium point cannot keep the price and inventory stable at the equilibrium point. The price and inventory are often higher or lower than the equilibrium point.
Inventory cycle management
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The management of inventory cycle is through the inventory cycleControl model, in order to ensure productionContinuityAt the same timeEconomy。Inventory is divided into single cycle inventory and multi cycle inventory according to whether the inventory is a single cycle demand or multi cycle demand.For items with single cycle demandinventory control Is a single cycleInventory managementThe inventory control of multi cycle items is multi cycle inventory management.
The so-called single cycle demand refers to the demand that only occurs in a short period of time or has few expectations. It is also called one-time demandOrder quantity。Single cycle demand in industrial enterprises generally has the following two situations: it is the demand for some kind of goods that occasionally occurs, such as Christmas cards, which often occurlife cycleThe indefinite demand for short goods, such as perishable goods or other goods with short life cycle and outdated, such as periodicals, daily newspapers, etc.The so-called multi cycle demand refers to the repeated and continuous demand for a certain inventory for a long enough period of time, resulting in its inventory demand must be constantly supplemented.Multi cycle demand is common in industrial enterprises.
