Random Motors ships cars to Hong Kong on a constant basis.However,it is not unusual for the slower ocean freight method that the company uses to experience problems with weather,equipment breakdowns,accidents,or even labor problems.Which of the following would be the best suggestion for Random Motors to pursue to ensure that no out-of-stock conditions in Hong Kong would cause dealers and consumers concern?

Question

Quizplus · Accepted Answer

Maintaining a 30-day inventory in Singapore and another 30-day inventory at the company's distribution center in Hong Kong would ensure that there is always a buffer stock available in case any unexpected delays or problems arise with the ocean freight method. This would help prevent out-of-stock conditions and alleviate any concerns for dealers and consumers. Option A would be too expensive and should only be used as a last resort. Option B is not a reliable solution and could create more problems. Requiring dealers to order six months in advance (Option C) may not be feasible for all dealers and could lead to increased inventory costs for Random Motors. Purchasing no-fault insurance (Option E) may be a good idea, but it does not address the issue of out-of-stock conditions.

Random Motors Ships Cars to Hong Kong on a Constant