There are a number of items that can be learned from the case and subsequent additional research, and one of the more important being the impact of high levels of inventory on profitability. Black and Decker had to deal with large amounts of finished products whereas Cisco was severely impacted by a huge amount of materials which are used to manufacture the finished products (Banker, 2010l Berinato, 2001). In either instance, the cost of holding large amounts of inventory not only impacts working capital, but it can also contribute to obsolescence, damage and increased storage costs (Hamel, n.d.).
Just having an excellent information system is not sufficient to reduce inventory to the lowest effective levels, it takes a true understanding
