Friday, October 26, 2012

The Beginning Continued

Another post today for a couple of reasons, one being the need to create more posts so the blog gets hits when folks do searches looking for the information that this blog is here to address.

And the other to continue with the discussion of Obsolescence.  If you read the first blog I suspect, yes even hope, that you got the end of month report and took a look at the numbers for your dealership.  I said anything over 12 months is obsolete and that is true, but increasingly there is another school of thought that states:

              Anything in inventory over 9 months with no sale is obsolete.

So if a part doesn't have a sale between 7 - 12 months it is considered obsolete with a 75% chance of never selling.  Mike Nichols and some of the other inventory gurus now believe that there should be 0% of inventory value in the over 12 month category and less than 2% within the 7 - 12 month category.

I think this may be a little tight but it is totally doable within the manufacturers terms of trade.

How does your inventory compare to these numbers?

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