Stocking is an important aspect of tire business operations, and any fluctuations in the upstream, midstream, and downstream of tires can cause ripples in the end market. For tire enthusiasts, price and hoarding are important linking points for market business, whether it's wait-and-see or hoarding. So, how can we effectively control funds and reasonably stock up under rising prices?
According to data, the price of rubber, the raw material for tires, broke through the 14000 line on September 1st, an increase of 5.99%, reporting at 14160 yuan/ton, marking the beginning of the "Golden Nine" era. It is observed that on September 4th, the price of rubber continued to rise, reaching a maximum of 14735 yuan/ton. As of September 5th, it is still operating at a high level above the 14000 line.
Recently, apart from rubber, carbon black giant Cabot (China) stated that due to the overall environment of the domestic carbon black market, in order to ensure stable supply and high-quality services, the sales price of all special carbon black products produced in China will be adjusted to 1500 yuan per ton from August 16, 2023. Faced with high cost pressures, tire companies are afraid of being "trembling" and will inevitably increase tire prices to maintain their own profits.
The major fluctuations in raw materials and the subsequent wave of price increases have started to panic again. Should we stock up or not? How much are you hoarding? Stocking formula: Order quantity=demand - inventory demand: It is the estimated sales volume of the store during the order cycle time. The estimated sales volume can be divided into specifications and models based on the sales volume of previous years, quarters, and months in the same period. To prevent a sudden increase in sales from leading to insufficient inventory, the demand is usually supplemented by a minimum of 20% of the safety stock. Order quantity: Order quantity=demand inventory
In addition, being familiar with the ordering cycle of the store can to some extent reduce unnecessary financial losses, and the ordering cycle is the interval between the arrival of two orders. Extending the order cycle can reduce logistics capital costs, and shortening the order cycle can reduce inventory quantity and alleviate warehouse usage pressure. The inventory quantity during the order cycle should be greater than the demand of the store during the order cycle.
When considering how many tires are needed to calculate the timing, operators need to consider factors such as market demand, supplier information, and their own capabilities.
1. Varies with market demand: If the market demand is high, it can be considered to increase inventory. However, if market demand is limited, it is necessary to reduce inventory.
2. Supplier Information: For tire stores, the quality of the supplier's capabilities is also one of the factors considered for stocking. If high-quality tires can be provided, they can be purchased appropriately. However, if the tire reputation provided by the supplier is not good, then it can be considered to replace the supplier.
3. Self ability: Operators need to consider their own abilities. If there is sufficient funds to purchase high-quality tires, then increasing inventory can be considered. If there is not enough funds, it is necessary to consider reducing inventory.
In situations where the market situation is not clear, do not be aggressive. Let others make a lot of money, and exchange your own Land Rover for a bike! 'Cash is king', blindly hoarding goods and ultimately resulting in inventory gains. It was discovered that the money was earned, but it was all pinned on the tires. Whenever a manufacturer or dealer holds a tire promotion or launches a new product, they can only do nothing to keep their "old goods" in their warehouse and cannot exchange their inventory for new ones.
The inventory management of tire stores should consider the needs of different tire types and sales seasons. Generally speaking, tire stores need to prepare a certain amount of inventory for each tire type to ensure that they can achieve "tire sales" throughout the entire sales season, regardless of market demand, increasing inventory during peak seasons and decreasing inventory during off-season;
In addition, tire stores need to prepare a certain amount of inventory for each brand and model, with full specifications to ensure bottom storage; If it is close to the supplier and there is no need to prepare a large amount of inventory, it can be appropriately prepared according to the store's shipping pattern in recent months, just like eating less and having more meals to ensure the normal operation of the "digestive system". Tyres can also be produced in small quantities and batches to ensure a healthy inventory.
Disclaimer: The image materials and articles on this platform come from the internet, so the copyright belongs to the original author. If any infringement is caused to your copyright and interests, please contact us. We apologize deeply and promptly delete it. Article source: Tire Business
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