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What can be the consequences of under stocking?
The following can be the consequences of under stocking:
- Production process cannot be operated efficiently, resulting delivery schedules.
- Firm may end up paying an idle labour force due to the production hold ups.
- Organisation may loose its important customers, due to the delay in meeting customers’ orders.
- Unfavourable prices and quality Increased administration costs.
- Due to under stocking it will not be easy for the organisation to meet the unexpected demands of customers.
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