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Whats hand to mouth buying?

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Question added by Mohamed alhaan khan , marketing executive , stradegi solutions
Date Posted: 2017/03/09
Jakub Dabrowski
by Jakub Dabrowski , Customer Service Manager , Mystery Escape

Buying only the smallest possible amount of goods to fulfill the current needs of the company. Other name could be "zero-stock". In its foundation it's for immediate use/consumption, not planned in advance.

Examples:

- for own needs: we don't keep spare office supplies/materials/goods/etc, we have just what we need at current time and is used by our staff. We order new only when we are done with what we have AND if there is a need for them.

- for production/sale: we don't keep anything in stock; once we receive order from customer - we buy what we need and start production.

 

Pros:

+ no stock space needed

+ limited waste

+ no obsolescence

+ no blocked capital in materials

 

Cons:

- possible production stop on shortage of materials

- possible higher cost of buying depending on the market of given materials (high/low season, availability, etc)

+/- but also the cost can be lower at certain times

 

 

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