There’s invisible supply, and visible supply. Visible supply includes the amount of a commodity that’s being stored and transported—any that's available for sale right now.
It’s true...people these days sell stuff that doesn’t exist yet. That’s what futures contracts are all about. For instance, a farmer might sell next year’s wheat this year via a futures contract. That wheat wouldn’t be a part of the visible supply.
Only this year’s wheat, whether it’s stored or in trucks, is the farmer’s visible supply. Likewise, the farmer could enter a futures contract with visible supply, writing in the for-sure guaranteed amount of wheat based on the amount that’s in storage right now. It’ll just be delivered...in the future. And no, Doc Brown has nothing to do with it.
The visible and invisible supply are important concepts when you think about supply and demand, especially for perishable goods. The visible supply is current demand, but the invisible supply (the expected but not-yet-available supply of the future) affects demand, too.
For instance, if there was a dust-bowl type situation, that would imply the invisible supply will be sparse, making prices for the current visible supply skyrocket, assuming a lack of a good substitution.
In non-Dystopian scenarios, options, futures, and forward contracts all have weird effects on current demand. The whole reason investors enter these contracts instead of just buying now is because they're forward-looking, which makes expected supply affect current demand. Plus, it can be great for both buyers and sellers to lock in prices. It’s harder to run a business with fluctuating prices, but futures contracts can provide stability in commodity costs for businesses.
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Finance: What is inventory?2 Views
Finance allah shmoop What is inventory Well it's Just stuff
you have for sale in one form or another An
auto dealer Well all those cars she has sitting out
there in the sun is a dive bombing targets for
the birds Yeah while their inventory to the car dealership
the cars are inventory the loads of nose hair trimmers
sitting on the shelves at the well appointed nostril fine
store best nostril trimming store in the world Yet their
inventory albeit kind of gross ish inventory especially after use
the four thousand yards of denim cloth sitting in the
weaving factory waiting for thirteen year old girls in thailand
toe weave it all together to make levi's for the
gap Yep that cloth is inventory It isn't finished inventory
It's just a work in process not yet ready for
prime time or a prime thigh or whatever But it's
an asset for the company who owns it and it
is held as inventory on the balance sheet Work in
process right there at the balance sheet right there Okay
And when that inventory is sold and turned into revenues
it'll just become part of the expenses line on the
income statement usually has cost of goods sold or caw
Gse that's What people in the accounting bids say Cocks
thie Inventory is a good but inventory is always good
Of course as many a customer has learned after taking
a hefty shock straight to the hunger And that hurts
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