Searches related to Two industrial distributors each start out selling a single

Question

Searches related to Two industrial distributors each start out selling a single brand of motor and both achieve annual sales of $100,000 after one year. Over the next two years, both grow their annual sales to $1,000,000. The first distributor grows sales for the same single brand of motor. The second distributor adds nine other brands of motors and achieves $100,000 in sales for each brand. a) Once they have reached $1,000,000 in sales, which of the two distributors would you expect to maintain higher inventories? Explain (max 50 words).

Explanation / Answer

The second distributor who is maintaining 10 brands of motors has to maintain higher inventories. This is due to separate safety stock for each of the brands to avoid stock out situation which maximizes the overall inventory.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.