Friday, October 3, 2008

Inventory Managment and the Economy

As I read the news over the past few weeks, it occurred to me that the "credit crisis" could have a strong effect on how companies handle their inventories and in return effect the price of consumer goods. Those companies that require short term loans to purchase their inventory in large quantities for quantity discounts might have to order smaller quantities based on how much capital they have on hand. These cost increases would then be passed along to the consumer. If you take into account the devaluation of the dollar, the increased taxes from bailing out Wall Street, and the large hits many 401(k)'s have seen lately; American consumers have a lot to be worried about these days.

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