Why factory often avoid receiving extra inventory?

Often factory will order 5 percent extra just in case if few parts got damaged. When they order the parts, they inspect each of them before assemble.

Now the odds of receive damage parts can be variety.

I can understand it need order extra just in case otherwise factory wouldn't keep business going with missing parts.

But what I don't understand is why when all parts comes in perfect include extra, they get super picky and always find excuse over why rejected any extra parts and pick tiny reason to send it back to suppliers to get refund.

Instead can't they use extra parts for next production when made same product again in few months? Just order little less next time and use extra parts as free to use to save shipping fee. Also save staff time doing reorder same parts few months later.

2 Answers

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  • david
    Lv 4
    1 month ago
    Favourite answer

    Nope. It costs them less if they send back the extra parts, reduce the payments and invest in short term/overnight lending. Also they need not pay for storage space. 

  • 1 month ago

    Maybe they don't have room to store them.

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