twesterm said:
Deman may be large for something initially but the demand will eventually go down. If you go from producing a million units in a month to 600k to 400k to 300k, you suddenly have a facility that can produce a million units per month but it's only running at 30% capacity. That's awful. Furthermore, as time goes on, the cost to produce your items (especially electronics of any kind) becomes cheaper. So while I could make two months supply of something in a month, next month it might be cheaper to produce and I would have wasted money. So it's not that any company wants to see their product have shortages, it's that they don't want to waste a giant amount of money. |
Plus 1
Not to mention, god forbid that the product isn't selling as well as you thought it would. Example- you make 10 million of those units and you sell just 3 million. You pay for warehouse space for 7million units and then there is a fire sale and you lose your arse. It would not only be ignorant to overproduce rather than do the slow steady stream that you have planned for.
And if the product does go on to sell like hotcakes you can always push the factory to turn out more units ala another shift or overtime etc...
"If you've got them by the balls their hearts and minds will follow."
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