Originally Posted by samab
Inventory is inventory. I was just responding to your post questioning how many GT are ultimately "sold".
You keep saying "Inventory is inventory"... What does that mean?
For Apple, and its channel partners, inventory has a cost:
(the time value of money tied up in inventory, space costs, shipping costs, receiving costs, handling costs, etc.) Once the inventory is sold those costs are gone. Until the inventory is sold, by agreement, the reseller can return the inventory to Apple (with certain limitations) at the cost of shipping, receiving, restocking, etc.
With the way electronics are being introduced into today's marketplace, there is also a certain amount of perishability
associated with inventory -- its value decreases the longer it is being held in inventory (even as additional costs are being added, as above).
A good example of perishability
-- An orange grower in Los Angeles picks the oranges when they are ripe;
-- He loads them on a train destined for New York City.
-- the grower has out standing orders for, say, 30% of his harvest
-- as the train travels across the country additional carloads are sold along the way
Ideally, when the train reaches NYC, all the carloads of oranges remaining are contracted for sale.
Worst case, the entire trainload reaches NYC with none sold -- there is a glut of oranges -- they are beginning to rot.
Realistically, the price of oranges is carefully negotiated along the way, by buyers and sellers, with consideration given to the "perishability" of the inventory.
Edit: Yeah, I know -- with Florida Oranges, the consumer just needs to stick her hand way back in the gondola and the grower will hand her a carton of OJ.
Certainly this is apples and oranges [pun], but no modern reseller wants to hold inventories of rapidly changing electronics for anything longer than 6 weeks -- Rather, 2 weeks or as close to JIT as possible. Savvy manufacturers, like Apple, are well aware of this, and do everything they can to work with their resellers to help them forecast, plan, order, sell and re-balance their inventories. This works to everyone's benefit: Apple, Resellers and the consumer.
Modern Production, CoGS, Inventory Management, Channel Management, systems take all this into consideration (including the perishability of inventory).The companies that do this well, prospe
r -- those that don't, languish.Apple, especially Tim Cook, does this as well as anyone.
I sincerely doubt that Samsung, HP, Dell, RIM, MSFT, etc. come close to Apple's channel and inventory management...
So, no: Invnetory is not