Question

What are the consequences if a company fails to manage inventory adequately?

1) Decreased customer satisfaction
2) Increased carrying costs
3) Stockouts and lost sales
4) All of the above

Answer 1

When a company fails to manage inventory adequately, it can lead to decreased customer satisfaction, increased carrying costs, and stockouts and lost sales.

Step-by-step explanation:

When a company fails to manage inventory adequately, it can lead to several consequences:

1. Decreased customer satisfaction: If a company does not have the right inventory in stock, customers may not be able to purchase the products they want, leading to dissatisfaction.
2. Increased carrying costs: Poor inventory management can result in excess inventory, which can increase storage and maintenance costs.
3. Stockouts and lost sales: Inadequate inventory management can lead to stockouts, where the company runs out of a particular product. This can result in lost sales and missed opportunities.

Therefore, the correct answer is 4) All of the above.