It’s a simplified example of a broader principle. This structure shows how oscillation can emerge from a very simple system and how it can be remedied by adjustments of the delays. Oscillating systems are very much a thing and this explains why.

By the way, what you said about stock levels is correct, of course, but doesn’t necessarily avoid oscillations. See, all of these metrics are feedback-based as well. With a delay. How much history do we take into account? Are account lead times influenced by delivery times. This is a classic problem in system dynamics: where do we draw the system boundary? Since everything is connected to everything, the right thing to do is to model the entire universe. Since this is not practical, we draw a line _somewhere_. _Where_ exactly does not matter much as long as the resulting model is useful.