At PlastiPharm, when a customer places an order, the system generates how many components are needed to make the product and then allocates what is in current inventory to fill that order. Why is it important for the system to know how many days of inventory are available?

Knowing what inventory is on hand makes it possible for the company to look at market dynamics and hold onto inventory if it can sell later at a higher price.

Knowing the number of days of inventory available informs the company about how long it has to clear out components that are about to expire.

Knowing how much inventory is available informs the company on whether it can meet customer demands and deadlines.

Knowing the levels of supplies available allows the company to know how much of its cash is tied up in inventory.