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GANT, a Swedish clothing brand, is a virtual organization that supplies clothes wear to Pyramid Sportswear AB.

Pyramid employs very few staff in a move to cut down costs of operations. To survive in the competitive global markets, the company must invest in rigorous monitoring of sales and stock, while keeping inventories as low as possible.

The company also realizes that it is no longer important to order for stock that it does not need.

(i) Discuss your view regarding this inventory policy. (5 marks)

(ii) Explain the assumptions that will guide in determining the adequate level of inventory.

Sagot :

The view regarding this inventory policy by GANT is that there'll be a reduction in the revenue of the company.

How to illustrate the information?

It should be noted that inventory policies are used to determine the best way that a product can flow through a supply chain.

Here, are are informed that GANT supplies clothes to Pyramid and since Pyramid employs very few staff in a move to cut down costs of operations, it'll lead to the reduction in revenue

The assumptions that will guide in determining the adequate level of inventory include the demand and level of stocks.

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