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Questions that aid in determining factors surrounding stocking decisions are:
- How critical is the material to Postal operations (e.g., will the lack of the material delay processing or cause a loss of revenue)?
- What are the supply and demand patterns (e.g., is there enough demand to stock the item; can inventory be built up in anticipation of future demand)?
- Is the item expensive or fragile, does it have a short shelf life, or is it otherwise particularly prone to loss (stocking is costly in these instances)?
- Do market sources dictate the amount of inventory stocked (e.g., an oversupply of items may need to be stocked when suppliers no longer carry items that are needed to support operations or for commodities traded on a worldwide market or when inventory can be purchased to hedge against expected higher prices)?
- Do quantity discounts; reduction in shipping, clerical, or setup costs; and other possible cost savings or benefits of carrying quantities greater than needed outweigh increased inventory costs (e.g., item, carrying, ordering, stockout, and capacity-related costs)?
- How long will it take to get the material (a short lead time often means that stocking can be minimized or even eliminated)?
- Is storage space available to handle the material (Postal or commercial)?
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