The weakness is Managers may order unnecessary goods which means Goods are ordered only based only on in-store information, there is no forecast, no sales focus and there is no approval for goods ordered by management. This is breach of impact on information goal: validity. Inventory could be overstated if the unnecessary goods become obsolete. Please answer below question : 1. Write The justification behind this strengths of LAF's purchase process. 2. why it can be considered as weakness?
Question
The weakness is Managers may order unnecessary goods which means Goods are ordered only based only on in-store information, there is no forecast, no sales focus and there is no approval for goods ordered by management. This is breach of impact on information goal: validity. Inventory could be overstated if the unnecessary goods become obsolete. Please answer below question : 1. Write The justification behind this strengths of LAF's purchase process. 2. why it can be considered as weakness?
Solution
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Justification behind the strengths of LAF's purchase process: The strength of LAF's purchase process lies in its autonomy and flexibility. Managers have the freedom to order goods based on the immediate needs and demands of the store. This can be beneficial in situations where there is a sudden surge in demand for a particular product, allowing the store to quickly replenish its stock and meet customer needs. Furthermore, this process eliminates the need for a lengthy approval process, making it more efficient and responsive to changes in the market.
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Why it can be considered as a weakness: While this process offers flexibility, it also has its drawbacks. Without a proper forecasting system or sales focus, managers may end up ordering goods that are not in demand, leading to an overstock of unnecessary items. This not only ties up capital in unsold inventory but also risks the goods becoming obsolete. Additionally, the lack of an approval process means there is no check and balance system in place, increasing the risk of errors or misuse of funds. This could potentially breach the information goal of validity, as the inventory could be overstated.
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