How could the cost of inventory be reduced by holding the inventory in raw components instead of circuit boards/subassemblies ? My understanding is that a subassembled part itself is a product of many raw/basic components. Now instead of storing sub assembly, if we store raw components, then the inventory is supposed to increase :(
Any pointers please ?
Hello Max,
A potential answer to your (fair) point is that the same raw material can be used to produce different circuit boards/subassemblies. In that case you have to storage less material, because you produce on demand what your clients need.
Does it make sense?
Hope it helps,
Luca
