Material Cost Question:
Tell me what can be the consequences of under stocking?
Answer:
The following can be the consequences of under stocking:
-Production process cannot be operated efficiently, resulting delivery schedules.
-Firm may end up paying an idle labour force due to the production hold ups.
-Organisation may loose its important customers, due to the delay in meeting customers’ orders.
-Unfavourable prices and quality Increased administration costs.
-Due to under stocking it will not be easy for the organisation to meet the unexpected demands of customers.
-Production process cannot be operated efficiently, resulting delivery schedules.
-Firm may end up paying an idle labour force due to the production hold ups.
-Organisation may loose its important customers, due to the delay in meeting customers’ orders.
-Unfavourable prices and quality Increased administration costs.
-Due to under stocking it will not be easy for the organisation to meet the unexpected demands of customers.
| Previous Question | Next Question |
| Can you please explain why should over stocking be avoided? | Explain ABC Analysis? |