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Answer :
50 hammers per month is the correct choice for Kris Lee's inventory policy based on his average monthly demand for hammers.
The correct answer is a).
Kris Lee, the owner and manager of the Quality Hardware Store, faces the task of reassessing his inventory policy for hammers. Efficient inventory management is crucial for ensuring that the store meets customer demand while minimizing carrying costs and stockouts. In this context, understanding the average demand for hammers per month becomes essential.
With an average monthly sales volume of 50 hammers, Kris Lee must align his inventory policy with this demand level to maintain optimal inventory levels. Ordering fewer hammers per month could result in stockouts, leading to dissatisfied customers and lost sales opportunities. Conversely, ordering more hammers than necessary would tie up valuable capital in excess inventory and increase carrying costs, potentially leading to obsolescence or spoilage.
By ordering 50 hammers per month, Kris Lee can maintain a balanced inventory level that meets customer demand while minimizing carrying costs and stockouts. This approach allows him to efficiently allocate resources and optimize the store's profitability. Additionally, monitoring sales trends and adjusting the inventory policy accordingly will ensure that the store remains responsive to changing customer preferences and market dynamics over time.
Therefore, based on the average monthly sales volume of 50 hammers, ordering 50 hammers per month (option a) represents the most suitable inventory policy for Kris Lee's Quality Hardware Store.
The correct answer is a).
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