Question

A. Flow n Breeze Ltd decided to offer a narrower range of clothing to its customers in the future. How might this decision affect the company’s level of clothing inventory? Clearly explain your answer. (4 points)

B. Lately, Decker Ltd found that there was a deterioration in the quality and reliability of bought-in components. These components are a critical part of the machinery which the business assembles for its customers. How might the poor quality of the components affect the company’s level of component inventory? Clearly explain your answer. (6 points)

Answer 1

Answer:

A. In the event that the administration of Flow n Breeze Ltd choose to offer a smaller/narrowwer scope of apparel to its clients later on, this decision would render its exisiting stock of garments/clothing as pointless. (other than that scope of garments it wishes to offer). It would need to directly off this stock and present it at its saleable cost in the wake of representing selling costs. This would likewise prompt an inflation of working costs sooner rather than later.

B. The low quality of the parts influence the organization's degree of component stock in light of the fact that these components are basic to the tasks of the organization and an outcome organization should reevaluate its choice of either going for purchased in components or getting them customized explicitly according to their prerequisites or source a vender furnishing the components with their necessary quality standards. On the off chance that the organization decides to end such parts, it will have no alternative however to write off such component from its stock as it is no utilization to the organization.