However, this additional line of credit would be not to maintain ongoing business but to allow for growth, sales retentions, and foothold in the industry. As soon as the cash was received from the factoring division of the bank my first step would be to correct the lack of finished goods inventory. In the case on exhibit 3 the reduction of lost sales for increasing finished goods was an opportunity waiting to happen...
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In the case on exhibit 3 the reduction of lost sales for increasing finished goods was an opportunity waiting to happen. This should have been a clear indicator that not only were they loosing sales on these stockout problems but this would eventually turn into bad reviews for the company, lack of interest in buying products, and more than likely loosing ground in the industry...
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