Research a company that has reduced its inventory holdings over the last few decades. What risks...

Research a company that has reduced its inventory holdings over the last few decades. What risks is the company taking? Has this made their inventory more or less difficult to manage?

Please answer with details.

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Expert Solution

Wal-Mart has reduced the inventory holding past few decades and it has adopted a strategy of water supply chain management as it has improved its cash conversion cycle and lowered the cost of managing inventory and it has also bettered the overall turnover so it had led to overall enhancement of the management of the inventory holding.

The company is taking a risk by holding a lesser inventory as when there would be an increase in demand it would not be easy for the company to deal with demand and it will have to manage with fulfillment of demand.

It had made the company to better manage the supply chain management and it has lowered its overall cost of management in regards to inventory and it has also improved the cash conversion cycle so the company has improved its quick ratio as well and the company has effectively increased the overall turnover so it can be said that management of inventory has led to betterment of the operation of the company and effectiveness of the operations of the company.

Walmart has been serving from past seven decades and this company has grown into a larger company but the inventory management has been one of the best of the industry and it has adequately managed with its highly available inventories and it has continuously managed the supply chain and cut upon the cost so there has been an effectiveness in increase of the profits, and reduction of the cash conversion cycle so this company has managed to to increase the overall market capitalisation also as it can be reflected in past various economic adverse cycle and it has also survived through tough economic situations.

jeff jeffy answered 1 year ago

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