Gartner Research

Supply Chain Brief: Overproduction to Absorb Fixed Costs Must Be Governed as Anticipation Inventory

Published: 26 October 2017

ID: G00328330

Analyst(s): Paul Lord


Supply chain leaders are challenged to simultaneously control working capital and minimize the cost of product supply. This note analyzes the conflict between profit opportunities and balance sheet risk so that production decisions strike the right balance to optimize business performance.

Table Of Contents

What You Need to Know


  • Organizational Mindsets and Bias Drive Overproduction
  • Financial Accounting Converts Sunk Capacity Cost Into Anticipation Inventory

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