3 ms·
Which screws over any business that has a time lag between buying parts and selling the final product. If the value of money goes up as the product is manufactu
by pdkl95 9y ago
Which screws over any business that has a time lag between buying parts and selling the final product. If the value of money goes up as the product is manufactured, you have to reduce the price. If money deflates ~faster than your profit margin, profitable business is impossible.
[1] after expenses and other minutia
- darawk 9y agoYou can hedge to fix that problem, if you are so inclined.
- pdkl95 9y agoHedging might fix small amounts of temporary deflation, but it isn't going to fix the fundamental problem of not being able to recoup the initial investment in materials. The only way to fix this would be to require payment before manufacturing the goods so there isn't a time lag.