Answer to Question #206642 in Management for bango

Question

why eskom should keep more stock ratherthan less

Answer 1

As an electricity generation plant, Eskom should keep more stock rather than less stock because it's more cost-effective and also helps to meet customer service targets without experiencing stock-out. More electricity is generated than sold in electricity generation plants because some energy is lost either through heat during transmission and distribution or through direct use and thus, Eskom generates at a maximum during specific times so as to lower the cost of energy during generation to a minimum. More stock also ensures Eskom meets maximum supply capacity without depleting the generated stock.