BUISENESS MANAGEMENT
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Customers will not be able to buy what they want
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Staff will be made redundant
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Higher storage costs
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Items could deteriorate with age
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Detailed explanation-1: -One of the biggest risks of overstocking is not having enough space to store the parts that you really depend on. This is why you shouldn’t think of each spare part; try to focus on the entirety of your inventory instead.
Detailed explanation-2: -Overstocking is one of the most important factors which results in changes of carbon stocks (Reeder and Schuman, 2002) and soil degradation, particularly in sandy soil, vulnerable to degradation through physical erosion.
Detailed explanation-3: -Both extremes have their problems. Carrying too much stock means tying up capital that could be better used elsewhere, whereas carrying too little generally equates to lost sales and the potential for loss of customer loyalty – the death rattle of customer relations.