Replies to post #113647 on Biotech Values

[iwfal]

So by your timeline wouldn't you have thought that the inventory adjustments have been accomplished over the first 2.x months?

a) 'My' assessment of the channel inventory isn't really 'mine' - I have hard quotable numbers with reasonable adjustments. (In contrast yours is, as the above quote makes apparent, exactly what dewo hypothesized - a number you erroneously (see #b) derived to fit your latest doom and gloom scenario (sorry, but you do seem to have a habit of working the problems backwards to fit your worries))

b) There is no particular reason that the inventory adjustment time should exactly match or be limited by the months of inventory - it is in fact what you should expect given the limits of control loops. Thus there are plenty of examples inventory adjustments taking lots longer than the total amount of inventory in channel. For example by your type of reasoning inventory driven recessions should last no longer than the amount of inventory in the channel - and clearly this is not true. Inventory adjustment times are control loop drive complicated by changing end user demand. Such control loops, depending on how accurately and how frequently they assess inventory and depending upon how end user demand is changing, normally takes 2x to 4x as long to settle out as the amount of inventory adjusted in today's modern world. In fact it is so common that I actually predicted it as a reasonable possibility here:

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