Project description

Location and lead time affect inventory management and stock levels, and can even lead to overproduction and extreme waste in supply chain operations It�s no secret that inefficiencies in global supply chains have led to stockouts and shortages during COVID-19, which have hiked up the cost of some goods. But what is less reported is how these inefficiencies also lead to overproduction, resulting in an incredible amount of waste. In the food industry, for example, food overproduction and surplus have led to vast amounts of waste globally in economically developed countries. This isn�t good from a sustainability point of view or economic growth. Issues in demand forecasting come into play here. While many businesses are ordering extra safety stock, an additional quantity of a product is stored in the warehouse to prevent shortages; this practice can be wasteful if consumers don�t purchase orders. Indeed, experts now warn that holding as much stock as possible can create liquidity risks and drives up e-commerce expenses.

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