Question

Giant outlets was closure because of their leases have lapsed and not due to the economic climate issue in Malaysia. This decision was not only due to competition but because e-commerce and e-shopping have become trendy where many people prefer to do their shopping online and have the goods delivered to their homes. – (Star Online, 1st November 2017)

Explain the consequences if a hypermarket chain such as Giant fails to keep their perishable goods in fresh condition.

Pls do not copy paste the answers from other sources

Answer 1

The profitability of any type of business is closely related to the inventory and how it is maintained. This is due to the fact that inventory blocks a lot of funds in the business and any kind of miscalculation in the inventory management can result in huge financial losses to the businesses.

As we are dealing with the issue of hypermarkets are not able to maintain the fruits and vegetables in the fresh conditions, this is the issue f improper inventory management. If the perishable items are not maintained in a good condition, it will not only result in the loss of sales but these perishable products can be damaged or ruined very easily casing the loss of capital in the form of inventory of perishable products. Thus the firm will suffer from two ways, first is the loss of sales and secondly the loss of capital.

This can have a very negative and fatal consequence on the prospect of the business and can have a question mark on the financial viability of the company. It can reduce the profit of the company and result in a loss of revenue generation