What are the effects of inventory backlog?

Taking mahogany as an example, the impact of inventory backlog mainly includes the decline in order volume. Under the multiple pressures of sales task and capital flow, manufacturers cut prices or "exchange price for quantity" to clear inventory, resulting in a decrease in turnover, or even suspension of production or bankruptcy.

Especially affected by the economic situation, the downward pressure on the mahogany products market has intensified and the market has shrunk significantly. The problem of survival has replaced the problem of development. Under pressure, on the one hand, mahogany manufacturers began to reduce the sales price of mahogany furniture with collection value, on the other hand, they developed mahogany furniture with more "people-friendly" prices in exchange for market transactions.

The business of mahogany shop is especially deserted. If the inventory continues to increase, it will affect the production of manufacturers and suppliers and other problems, leading to the overall depression of the industry and so on.

Extended data:

The backlog of warehouses is the capital squeezed out by enterprises. In order to ensure normal operation, enterprises will have a certain amount of safe inventory, but if the inventory is too high, the backlog will directly affect the operation of enterprises. The demand planning of many enterprises is not based on objective demand, but a perceptual decision: raw materials are cheap, buy more.

Spare parts delivery time is long, buy more; Transportation risk is high, buy more ... Rolling demand forecast does not support ordering cycle, and no active measures are taken to manage inventory. Inventory turnover rate and old inventory digestion consciousness are not high, products with short warranty period are not FIFO, and even products and parts are not classified by ABC.

Inventory includes not only finished goods inventory, but also semi-finished goods inventory, raw material inventory, outsourcing processing inventory and dealer inventory. Many products have to be changed in design, upgraded or abolished due to functional defects, policy changes or changes in market demand, and raw materials, semi-finished products and finished products will be in stock.

People's Daily Online-Orders fell, inventory was overstocked, and mahogany merchants were forced to cut prices.

Baidu encyclopedia-backlog inventory