Hello Jennifer,
Inventory Management
I concur with you that inventory management involves activities of managing stock and that businesses should maintain an effective system to avoid monetary losses and customer reduction. Inventory management is a systematic approach involving storing, selling and sourcing finished product and raw materials ( Gallino, Moreno & Stamatopoulos, 2017 ). This assertion implies that inventory management involves maintaining stock at the right levels, at the right cost, and at the right time. In this respect, there is a certain cost involved in inventory handling, such as ordering costs and transportation costs in raw materials and holding costs. Regarding this, an individual should consider various factors such as lead time in raw materials, how goods are perishable when developing inventory management system. In this case, I do concur with you that businesses dealing with fast foods such as hamburger patties should develop a strong inventory management system to ensure that customers do not look at goods and services. Moreover, considering that goods are highly perishable, such businesses should ensure they maintain the right stock to avoid losses due to good spoiling. Therefore, I agree with you that inventory management involves maintaining the right stock, and businesses should develop the best approach to avoid losses.
Credit Policy
I concur with you that credit policy involves the guidelines of determining customers fit to be extended credit, but I dispute that medical procedures can be a good example in explaining credit policy. Credit policy includes set guidelines utilized in determining customers who can be extended credit, setting payment terms, defining limits, and procedures of dealing with delinquent accounts ( Chang et al., 2019 ). This allegation implies that customers can be billed depending on the organization’s credit policy, although other factors must be considered. In many scenarios, the regularity of a customer acquiring goods from a business and goods quantity are major determinants of getting credit services. Regarding this, there is a likelihood of providing fake data in medical procedures if healthcare centers provide credit services. Considering that hospitals do not know patients’ background information, and it is difficult to make follow-ups, especially if a customer is from a different country, it is not the best example of a credit policy. Therefore, I do agree with you that credit policy include set guidelines used in extending credit services, but I dispute that medical procedures are the best example of defining credit policy.
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References
Chang, K., Zeng, Y., Wang, W., & Wu, X. (2019). The effects of credit policy and financial constraints on tangible and research & development investment: Firm-level evidence from China's renewable energy industry. Energy Policy , 130 , 438-447. https://sci-hub.tw/https://doi.org/10.1016/j.enpol.2019.04.005
Gallino, S., Moreno, A., & Stamatopoulos, I. (2017). Channel integration, sales dispersion, and inventory management. Management Science , 63 (9), 2813-2831. https://sci-hub.tw/https://doi.org/10.1287/mnsc.2016.2479
