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ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions

Marlow Retail's marketing department launches a major promotion without informing the inventory and logistics function. Which problem is most likely to occur?

Stock-outs or delayed deliveries are most likely, because the promotion will increase demand but inventory and logistics have not prepared stock or distribution capacity. Poor communication between marketing and logistics therefore damages customer service and wastes the promotion's benefit.

  1. AStock-outs or delayed deliveries because demand exceeds prepared inventory levelsCorrect
  2. BA reduction in the company's share capital
  3. CAn automatic increase in the supplier's credit period
  4. DA change in the company's legal structure

Explanation

Promotions raise demand. If logistics and inventory planning are not told, stock levels will not be built up, leading to stock-outs and late deliveries. The other options are not caused by a lack of communication about a promotion.

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