ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Too little inventory leads to ____
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Wasted money
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Frequent reordering
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Shortage cost
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Inventory Procedures
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Explanation:
Detailed explanation-1: -5 Negative Effects of Keeping Too Much Inventory Limits cash flow. Reduces profits. Increases storage costs. Heightens risk of product obsolescence.
Detailed explanation-2: -You should reorder when you have 40 boxes of stock left in your inventory, which is four days of stock. Given that your lead time is also four days, the new stock should arrive just in time for you to continue selling without interruption. A reorder point is crucial for effective inventory management.
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