I would argue that the fundamental assumption that Company A and Company B EXPECT to sell the exact same amount, even though it is acknowledged that one sells in many more territories than the other, is false.

That is, given that sales expectations are an educated guess (backed up by math of course but still just an estimation) there is inherent error in them. As the number of times that guess is repeated to gain world wide sales expectations, that error rate increases. Obviously Sony understands this, big global company and all, but since it is NOT likely that they arbitrarily pick a number, it is HIGHLY unlikely that their sales expectation department would kick out the exact SAME number that MS would. Remove the exactitude of similar sales from your argument and I think you can acknowledge how quickly global sales stocks could differ from each other.

Additionally, regional differences in distribution channels, import/export laws, ease of access and warehousing fees all lead to a distribution landscape that varies by territory. Again, I am SURE Sony understands this and has it under control, but those things absolutely contribute to how much/frequently you ship to your various distribution channels.

Finally you have to take into accounts periods of high demand to deal, such as the Holiday sales period, black Friday in the US, or increased demand around reductions in price: all these further skew the demand as retailers are more willing to have more product on hand when demand is high. These effects are similar for Sony and MS in the big markets, however they differ across the globe; by definition a company who distributed in more territories would be affected more by this fluctuation in demand.

The combination of these above factors suggests that the distribution landscape for a global company is extremely complex and that answers as black and white as your answer above OR the "myth" you describe are highly unlikely. Rather I believe that the truth lies somewhere in between and anyone's opinion of how close the truth is to either the "debunking" or the "myth" itself are colored by their personal bias.

He made an oversimplification, but you made wrong assumptions, which is worse. First you suppose that smaller market have smaller stores, wrong: Singapore is a pretty small market but it is a 8 million city and have for sure bigger stores than, say, Montana or every other big plains US state, so shipping to Singapore (a small market) is more efficient than shipping to a big part of the US (a big market). Second, you think that shipping to a number of small countries is less efficient than shipping to just one big country, also wrong: not only small countries can benefit from point one (high density population), but also from the fact that you don't need a shipping channel per country. In fact the Republic of San Marino is a small country, but it is much easier to ship to San Marino from Italy than to ship to Hawaii from California, and so you don't need a warehouse in San Marino, you can just use your warehouses in Italy. Third, and this really does not make sense, smaller markets don't sell at slower rates, why should they? Take a look at Singapore, Arabian countries or other smaller markets, they're all megastores with lots of costumers.

Some things to consider
1. Distribution Centers - Sony has a chain of distribution centers to cater to different regions. Each distribution center needs to be able to cater to the supply requirements of all the stores it caters to
2. Distance of store from distribution center - the further the distribution center, the higher days of inventory is usually desired to minimize logistics cost
3. Number of stores catered to by Distribution Center - The more stores a distribution center caters to, the higher its required inventory level so as to be able to react to any spike in demand if any
4. Cost of shipment to distribution center- similar to distance of store to distribution center. But this also include customs/temporary storage fees etc. Higher cost of shipment would mean less frequent shipment but larger volume of shipment.
5. Demand - higher demand would mean that a larger inventory level will be retained to counter sudden spikes in demand. but this will also have to be correlated with distance and delivery cost and holding cost etc. if the distribution center is near by, a store that has large demand for an item can afford to retain a lower inventory level. But if its farther, more inventory is desired. Similarly, A store with small demand for an item can also opt to have a larger inventory level as oppose to its sales to save on delivery cost depending on which is higher, delivery cost or holding cost.

there are so many factors to consider as to why an item or product can have more inventory in stores and in warehouse and in distribution centers that is being sold in more regions as oppose to an item sold in less regions.

I've said this several times now, but this is addressed in the OP. I am fully aware that if there is more demand for the PS3 WW there will more stock. This was just to clarify, because many people seemed to make the assumption that equal sales but more spread = more stock, which is not true.

Your concerns are more or less addressed in the thread, if you care to read it all.

Smaller Market - Region or country where in the product is available but sales is small. Size of store or size of country has nothing to do with it. And yes, a "Small Market" does tend to sell at a slower pace. (and by smaller market, i mean market with small sales)

Your description of Rep. of San Marino using the warehouse in Italy is what is usually considered as a distributon center. This warehouse would have to have enough stocks to cater to Italy and to Rep. of San Marino and to whatever market/coutnery/ region it caters to.

Then you should explain that to those who think that shipping to big countries means shipping to big markets and vice versa. Shipping to Persian Gulf countries means shipping to a big market (because those countries are tightly packed and constitute just one market), and the same goes for Asian SouthEast, while on the other hand shipping to North America means shipping to a couple of big markets and a lot of small markets (Alaska is one small market, Hawaii consitutes another small market, Mexico is a small market and so on).

Here is a simple example

Product A and Product B both sells 900 units per week.

Product A is sold in 3 stores while product B is sold in 6 stores.

Each store vary in distance from the warehouse or distribution center

Legend:

Near - requires only 14 days of on hand inventory since it is near and can be replenished easily

medium - requires 21 days of on hand inventory and is harder to replenish

Far - requires 28 days of on hand inventory and is very hard or costly to replensih hence more stocks are maintained to lessen total cost

As you can see, total required inventory for a given week is 2500 units. Now take a look at Product B

The required inventory in a given week is 2550 units. 50 more than product A. 50 units isn't a lot but this is just an example. A very simple example. The only factor I considered here is distance from warehouse. There are more factors that can be considered such as delivery cost, holding cost, cost of money etc etc.

Though, I should point out that this is actually true for dry goods. For electronics, not so sure. But hey, its just an example. So yeah, I don't think that its a myth but is actually a real life scenario.

Not really directed at you, I only quoted you due to convinience (you know, fist post I saw and was kinda lazy to read back ) in hopes that other's would read it anyway.

The problem is, for this table to be right, you must assume that Sony's extra markets are further away from the warehouse than the main ones, which is not necessarilly true. We don't know how distribution works for these areas (namely Middle East), but it's probably quite good.

Of course there are many factors involved, but without knowing these factors we cannot conclude that Sony must have a bigger stock just because it sells in more countries. Anything else would be speculation, and it may well be wrong. That is all I'm arguing.

lol this