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The whole point of having so little stockpiled inventory is that if there's a reduction in demand or a new product is released, the minimum amount of money is lost unloading the excess product.

Back in the day, Apple would always be sitting on 10 weeks of inventory. When a downturn or new product would come out, it would force them to sell the backlog at a loss, which was very painful for them.



There is a flip side to this. An earthquake in Japan has car factories in the USA sitting idle a year later because of a shortage of parts.

A fire at a Foxcon factory in the run up to christmas would really hurt Apple.


In lost revenues, yes. But that just means less profit. Having inventory on hand and having to sell it at a loss or bury it (like the Lisa, for instance) means actually taking a loss.


But would it be worse than having billions in inventory?


They have got billions in inventory, it's just on Foxconn's books rather than Apple's.

Having very lean stock levels in a retail business can have drawbacks.




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