Question

At the end of the season, a merchandiser notices that 80% of the items he manages have left over inventory. Another merchandiser notices that only 20% of her items have left over inventory. Who makes better decisions

Answer 1

The second manager makes better decision amongst the two managers

Explanation:

Inventory refers to that part of the final goods or the products that have remained unsold for the current period. Generally, Inventory is associated with liability in the long term since they are associated with storage surcharges and obsolescence threats.

Amongst the two managers, the second manager is more capable of making a better decision since his decisions led to just 20% of the net produced goods to turn inventory which remains advantageous for the company. Whereas for the first manager, 80% of the items remain as inventory. Hence more risk and greater storage surcharges for the firm