1. Can you think of business reasons why increasing inventories in advance of a busy period is a good idea? What other busy periods might electronic/technology companies experience?
2. Can you think of any potential problems not mentioned which could/do arise when inventory is increased in this way?

Chinese computer manufacturer Lenovo had an annual turnover of $45 billion for the year-ended 31 March 2016, of which 66 percent was in the personal computer market. This market includes desktops, tablets and notebooks.
A report on the internet in October 2016 noted the company was increasing its inventory levels to five months’ worth. One site noted ‘While it’s not unusual for computer companies to begin increasing inventory to prepare for holiday sales, having this much inventory is a bit odd. If things don’t turn out according to plan, it may leave Lenovo sitting on three months of inventory.’ Techradar, a web-site which details and reviews all types of technology devices, listed one model of Lenovo laptop on sale for £149 in the weeks before Christmas. This price was considerably lower than some competitor prices. Such low prices may be achievable due to the location of Lenovo’s manufacturing facilities in lower cost countries – namely China, India and Mexico.