COVID-19 is among the top reasons why there is a car supply disruption. However, more than two years into the pandemic, we're still in this predicament. The shortage has resulted in record prices for new and used vehicles (although used vehicle prices are starting to come down).
Do inventories become less important over the business cycle?
- their inventories have become less important with respect to their performance over the business cycle. For the manufacturer supplier group, the trend lines also seem to converge, however there is no clear decline in the presence of inventory in total assets (Appendix A, Figure 1-20).
Why are there so many inventories in the automotive industry?
- industry is highly competitive, and overall manufacturing capacity in the automotive industry exceeds current demand, although it is at a historically high level globally (General Motors Corp, 2007 Form 10k, 1-143). As a result, there may be excess inventories in the industry from slowed
Why do Inventories increase during a recession?
- Since changes in inventory are tied to changes in sales, any spikes in this measure show that either discretionary inventory management decisions are being made, or that sales are overstated and the corresponding inventory is not being moved. During recessionary periods we should expect increases in inventories to be in line with
Why is inventory management important?
- Introduction Inventory is one of the largest and most important assets a manufacturing business possesses, and the turnover of inventory is one of the principal sources of revenue generation for a company. Inventory decisions directly affect the value of cost of goods sold and consequently