Limiting threshold value of back log

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anti-gremlin

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Limiting threshold value of back log

posted on May 20, 2022 02:25PM

Folks - don’t want to bother anyone at PYR since this is a generic sort of question and there is a lot of wisdom and experience on this forum.

Backlogs are indicative of an increase in product demand and that is a very very good thing. But they can also be indicative of an inability to handle orders, and in such a case are generally caused by supply chain bottlenecks, labour shortages, machinery and equipment breakdowns, machinery already working to capacity, low Op-ex levels, or other force majeure type of operational pressures.

PYR has a back log of almost $45MM. At what point could this become a deterrent to future orders? I know the answer is difficult to predict, but there has to be a limiting threshold value beyond which a future order placer would rethink the waiting period involved with placing the order with number #1 (i.e. PYR) and go with the #2 provider of almost-similar equipment.

To illustrate, I might want to buy a BMW now, but if the wait is too long I might settle for a VW instead.

There are mitigating strategies around this kind of scenario (licencing, for one), and I'm sure PYR is aware of the problem and the possible solutions.