inventory management

Question 1

understocking

Answer 1

when an organisation holds an insufficient amount of inventory to be able to carry out production or fulfill orders .

Question 2

Consequences of Understocking

Answer 2

The organisation may be unable to continue with production

The organisation may be unable to accept an unexpected large order

Question 3

Overstocking

Answer 3

When an organisation holds more inventory than it can use/sell.

Question 4

Overstocking disadvantages

Answer 4

Goods may deteriorate before they are used/sold

Goods may become obsolete