Spinners Should Sell Yarn before They Buy Cotton

摘要

To illustrate the challenges spinners face during these volatile times, please assume that you have a medium-sized yarn production plant operating with an average of 4,000 tons of raw materials, and finished stocks as working capital. The question is:How do you successfully operate this business during economic instability? The impact of temporary caution due to the global economic crisis in 2008 has slowly disappeared. Now the world faces a new crisis. We are passing through a period in which evennations with strong economies are worried. The basic economic rules do not apply because the intersection point of supply and demand does not determine the price. Expectations, rather than the values of real production and consumption, determine the price.