Question

1) a) Flow n Breeze Ltd decided to offer a narrower range of clothing to its customers in the future. How might this decision affect the company’s level of clothing inventory? Clearly explain your answer.

1) b) Lately, Decker Ltd found that there was a deterioration in the quality and reliability of bought-in components. These components are a critical part of the machinery which the business assembles for its customers. How might the poor quality of the components affect the company’s level of component inventory? Clearly explain your answer.

Answer 1

1.) Flow n Breeze Ltd. decided to give narrow range of clothes to its customers. It will affect their inventory system. If they are decided to give narrow range of clothes they don't need large quantities of inventory so, it will reduce their Closing stock.

2.) Poor quality of components will affect the overall quality of the product. It will make the product less demanding. If the demand is less the products will not move from warehouse to customer. It will increase the Closing inventory and will result less demand.