Observation

1. Most of the candidate did not attempt this question and majority of those who did, performed above average.
2. However, candidates were not able to clearly articulate the reasons for avoiding keeping too much inventory.
3. While many of the candidates performed averagely in the drawing and labeling of a Bin Card.

Reasons for avoiding keeping too much inventory

1. Excess inventory is a poor investment because it provides no financial return to the organization.
2. Carrying costs associated with inventory can reduce net income of organization during over-stocking period.
3. Inventory generates cost of storage and insurance which serves as additional expenses to the organization
4. It can reduce management ability to make quick decision on vital issues relating to material costing..
5. It increases risk of deterioration, spoilage and theft in the store.