Matt works as a sales representative at Tandem Industries, which manufactures and sells bicycles. He's the best salesman on the floor, but he also receives the highest number of customer complaints for late deliveries.

Which of the following, if true, best explains this situation?

A) The company uses enterprise solutions to manage inventory.

B) The company's manufacturing facility is functioning at optimum capacity.

C) The company's sales and logistics functions are tightly integrated.

D) The company keeps inventory levels low in order to reduce costs.

E) The company has an efficient credit verification process.

D) The company keeps inventory levels low in order to reduce costs.

Explanation:

Alternative D is the most appropriate to explain the situation described in the question above. The company probably keeps inventory levels low to reduce costs and is betting on an optimized customer service strategy aimed at meeting the customer's needs and desires to persuade him to buy the products, but despite the good service, we realized there is a flaw in inventory management, because despite keeping inventories low to reduce costs, there are complaints from customers for late deliveries, and an effective logistical process must ensure that the right product arrives at the right consumer and at right time.

Therefore, it is necessary for the company to adopt new inventory policies, to ensure that the goods are delivered at the ideal time promised at the time of purchase, as maintaining the current posture can damage the company's reputation due to negative feedback from current customers.

Option D. The company keeps inventory levels low in order to reduce costs

Explanation:

Option A is incorrect because enterprise solutions which are used for inventory management are not concerned with delivery of inventory to the customer.

Option B is incorrect because newer orders are not received to the extent if it results in late deliveries or late delivery date is not accepted by the customers.

Option C is also incorrect because integration of system is not concerned with the late inventory delivery if you don't have inventory in your stock.

Option D is also correct because lower inventory levels result in late deliveries to the customers and that the reason why they complain.

Option E is also incorrect because the credit verification process is before the sales approval which is again not concerned with the inventory delivery to the customers.