Keeping a larger stockpile seems like a one-time fixed cost, if you own the warehouse you’re operating? You need more shelf space, and you need to increase your inventory as a one-time payment. But after that, the inflows and outflows should be the same as before. And every year you have a chance of making bank in the event of panic buying.
The ideal outcome might be panic buying which leads to nothing but a bunch of warehouse owners saying “Darn it, we ran out of X right before the price went way high! Let’s keep more on reserve going forward in case that happens again in the future.”
I don’t think you can fully treat it as a one time cost. You also need to consider it something of a capitalized cost so the direct out of pocket is likely understating the economic cost.
Keeping a larger stockpile seems like a one-time fixed cost, if you own the warehouse you’re operating? You need more shelf space, and you need to increase your inventory as a one-time payment. But after that, the inflows and outflows should be the same as before. And every year you have a chance of making bank in the event of panic buying.
The ideal outcome might be panic buying which leads to nothing but a bunch of warehouse owners saying “Darn it, we ran out of X right before the price went way high! Let’s keep more on reserve going forward in case that happens again in the future.”
I don’t think you can fully treat it as a one time cost. You also need to consider it something of a capitalized cost so the direct out of pocket is likely understating the economic cost.