In line with the organization's objectives, the sales managers at MagnaCorp must ensure that all products are sufficiently stocked so that customer orders are fulfilled and stockout situations do not arise. The operations managers, on the other hand, have been instructed to lower inventory costs and hence, prefer to keep stock levels to a minimum. This situation is an example of ________.
A) management by objectives
B) secondary objectives
C) intermediate-term plans
D) planning subsystems
E) suboptimization

Question

Quizplus · Accepted Answer

This situation is an example of suboptimization, where the goals of different departments within the organization conflict with each other, and achieving one goal can negatively impact the other. The sales managers are focused on fulfilling customer orders, while the operations managers are focused on minimizing inventory costs, leading to a suboptimal solution for the organization as a whole.

In Line with the Organization's Objectives, the Sales Managers at MagnaCorp