Question

Select the correct answer. Benjamin manages the inventory at a textile company. He learns that the vendor has notified the company about the price of color dyes increasing substantially beginning the next month. What best practice should Benjamin follow to avoid buying the supplies at a higher price? A. purchase color dyes in smaller amounts, as and when required B. purchase and stock color dyes in the current month C. reduce costs on other materials to free up funds D. increase the price of the final product whenever the input increases

Answer 1

Benjamin manages the inventory at a textile company. He learns that the vendor has notified the company about the price of color dyes increasing substantially beginning the next month. What best practice should Benjamin follow to avoid buying the supplies at a higher price?

Benjamin should purchase and stock color dyes in the current month in order not to buy at a higher price the following month.

Step-by-step explanation:

As an experienced inventory manager, Benjamin must as a matter of fact take advantage of such notification given to him by the vendor by purchasing and stock color dyes in the current month so that the company would avoid not to buy at a higher price in the next month. This rare available opportunity presents to the company would enable the company to make more profit because they would buy at a lesser price in the current month and sell at a higher price the next month when the price of dyes shoots up from the original price.

Answer 2

The moot suitable answer is B. purchase and stock color dyes in the current month

Step-by-step explanation:

As the vendor has informed of the price increase in advance, the best thing to do will be to estimate the required number of dyes and then purchasing a reasonable quantity in advance during this month.

Increasing the price of the final product might have a negative effect on sales and buying in small amounts may increase the overall purchasing costs.