REPLY Age of material in a stock (SD6443)

[SDMAIL Douglas Franco]

Posted by  "Douglas Franco" <dfranco at cantv.net>

Dear Fred,

There was a perception of an excess of past due bills, because the increase 
in sales and inflation raise those numbers and the fraction of due bills 
increases. Inflation increases payments' defaults, because appliances 
were more expensive and salaries do not increase at the same pace. Therefore, 
managers perceive an increase in the overall delay of collecting bills. You 
know the rest of the story. It is unbelievable how people do not understand 
the kind of things obvious to any System Dynamicist; but even a bathtub seems 
confusing for most people. The store was sued by providers, because they could 
not pay on time,

the owner of the store was treated at the unit of intensive care of a local 
hospital, because a nervous and heart breakdown.

To most managers, in my experience, even simple measures like Stock divided by 
Average collection rate, are beyond their comprehension.


Douglas Franco 
Posted by  "Douglas Franco" <dfranco at cantv.net>
posting date  Thu, 17 May 2007 18:11:40 -0400