Raina and James run a small running apparel company that is gaining steam with customers. They currently sell their items at a few specialty running stores in town and at two regional locations of SportChek, a large sporting goods chain. They have an opportunity to get their products sold in other SportChek locations, but they've encountered a few stock-outs. They've been told by SportChek that they won't secure a larger distribution deal until they've sorted out their stock-out problem. Where should Raina and James focus their attention?
A) They should look at a new option for transportation as their current use of trucks does not get the items to the retail stores quickly enough.
B) They should focus on their warehousing in order to efficiently distribute goods to their retail customers.
C) They should implement a new inventory management system to maintain low levels of inventory but also minimize running out.
D) They should look at maximizing their profits by producing the running apparel overseas, where labour costs are lower.

Question

Quizplus · Accepted Answer

The stock-out problem indicates that there may be issues with inventory management. Implementing a new inventory management system would allow Raina and James to track inventory levels and make sure they have enough stock to meet demand without having excess inventory that ties up capital. This can help them maintain a healthy balance between inventory levels and supply chain efficiency, and ultimately improve their chances of securing a larger distribution deal. Focusing on transportation or warehousing may address symptoms of the root issue but won't necessarily solve the stock-out problem. Producing overseas for cost-cutting reasons may lead to compromising on quality, which could harm their brand and reputation.

Raina and James Run a Small Running Apparel Company That