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Explain the balancing act in capsim

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Reference no: EM132283011

It has been said that one of the major reasons Capstone companies go bankrupt is because the company is holding too much inventory. Sales forecasts were not met and the company's warehouse is full of stock that is tying up cash - leaving nothing left to run daily operations. Conversely, when companies produce too few units to sell, then they experience "stock-outs," which results in loss of sales and subsequent loss of cash for operations. Can someone explain the balancing act in Capsim of too much versus too little inventory?

Reference no: EM132283011

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