What Is The Importance Of Effective Stock Management?


1 Answers

Panchi Elizabeth Cheriyan Profile
Every department in a business plays an important role in business and also stock department is very important for an organization . Growth of business is depend on profit of that enterprise & profit maximization of a enterprise is depend on sale of that business is increases when if they complete information about stock . Also, there are many costs that a business incurs when it is both out of stocks and in excess stocks.For example, having too much stocks might cause certain stock holding costs such as the rent for building used, the risk of natural disasters, fire or theft etc. Also the opportunity cost of the capital that is tied up in this way is very highAlso, having very little stocks is also dangerous. The businesses might not be able to satisfy customers who come with a sudden demand. They lose customer loyalty. Also, if they lack stock of raw materials they might not be able to complete production thereby the resources will have to stay idle for a long time. Production process might be hindered. 

Answer Question