Material Handling Journal Tackles Inventory Control

Dewitt, NY - December 15, 2009: The Fourth Quarter 2009 issue of The MHEDA Journal, the leading online magazine for the forklift, storage and handling, and general material handling equipment industries, features an article from Dr. Albert D. Bates, president of the Profit Planning Group, discussing the issues with lowering inventory in cash-strapped times.

The article states, "The downturn in economic activity caught many firms off-guard. As a result of sales challenges, cash sufficiency has become a very serious issue. For the typical MHEDA member, cash now represents only 2.3 percent of total assets. It is a cash position that does not leave a lot of room for error.

"To offset the cash challenge, most firms have looked at reducing the 'cash traps' in the business, particularly inventory. While reducing the investment in inventory is a laudable objective, it is fraught with some danger. It is possible, and maybe even likely, that the drive to lower investment levels will trigger further sales declines through a higher occurrence of out-of-stock situations."

Bates takes the reader through several scenarios involving price reductions and changing of inventory levels, complete with computations and charts to illustrate his points. Among his findings, "Even a modest five percent reduction in inventory has the potential to lower sales volume, if the reduction lowers the firm's service level."

This is only one of many interesting tidbits offered in the article "The Siren Song of Inventory Reductions" in the Fall 2009 issue of The MHEDA Journal Online. Read the full text at http://www.themhedajournal.org/content/4q09/invenreduc.php. The print magazine was mailed out to subscribers on October 15.

For more information, contact Chris Powers, editor of The MHEDA Journal, (315) 445-2347, e-mail: chris@datakey.org.

About MHEDA
Founded in 1954, the Material Handling Equipment Distributors Association (MHEDA) is the premier source for manufacturing knowledge, education and networking. Through its member journals (http://www.TheMhedaJournal.org), e-magazines, newsletters, and industry wiki (http://www.wikimheda.org), MHEDA connects the manufacturers of storage and handling, lift trucks and conveyor equipment and distribution leaders for the purpose of delivering optimal solutions to the users of those products. MHEDA publications are the industry's voice for all matters related to the latest technology and the most up-to-date processes spanning the movement and storage of all materials. A 501(c)3 organization, MHEDA members span all of North America.

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