Question

Maeve has also applied for a loan at her local bank to finance the opening of the second boutique location. The bank requires Maeve to submit all relevant financial statements. After their initial review, the bank tells Maeve she needs to increase her inventory turnover ratio. The easiest way for Maeve to do this is to _____.

Answer 1

Maeve can boost her inventory turnover ratio by selling inventory faster or reducing stock levels.

Step-by-step explanation:

To increase her inventory turnover ratio, Maeve needs to consider two main strategies: either sell her inventory more quickly or reduce the amount of inventory she keeps on hand. Increasing sales can be achieved through marketing efforts, discounting old stock, or expanding her customer base. On the other hand, reducing inventory levels can be managed by ordering smaller quantities more frequently or using a just-in-time inventory system that minimizes excess stock.

Answer 2

The easiest way for Maeve to increase her inventory turnover ratio and reassure the bank is by implementing inventory management strategies such as just-in-time inventory system, streamlining the supply chain, and optimizing product mix.

Step-by-step explanation:

The easiest way for Maeve to increase her inventory turnover ratio and reassure the bank is to improve her inventory management. This can be done by implementing strategies such as:

• Implementing a just-in-time (JIT) inventory system: This approach keeps inventory levels low by ordering goods only when they are needed. It reduces holding costs and ensures that inventory doesn't stay on shelves for long.
• Streamlining the supply chain: By working closely with suppliers, Maeve can reduce lead times and receive inventory more quickly, thus increasing the turnover ratio.
• Analyzing and optimizing product mix: Maeve can focus on high-selling products and eliminate slow-moving or obsolete items from her inventory, which will help improve turnover.