Correct Answer - Option 3 : Project behind schedule
Explanation:
Negative stock/inventory:
- The warehouse has negative inventory/slack for an item if the issued quantity is larger than the quantity in inventory.
- Negative inventory/stocks refers to the situation which occurs when an inventory count suggests that there is less than zero of the item or items in question.
- Consequently, the inventory levels of the item are below zero and there will be chances of delay of project due to non availability of resources and the project can run behind schedule.
The type of negative inventories are as follows:
1) Timing
- This is probably the most common occurrence when looking into what is negative inventory.
- An example of a timing issue could be that a customer places an order for a product that’s out of stock, but you go ahead and mark the order as shipped because you know that production for the product will be wrapping up soon.
- This issue is probably the easiest to fix because once production is complete, you can make the necessary inventory adjustments.
2) Production
- During manufacturing, you need to take into account byproducts, scrap amounts, production statistics, and batch numbers.
- Misunderstanding your manufacturing orders or accidentally creating a duplicate can lead to manufacturing either not enough or too many products.
3) Inventory at multiple location
- A negative balance can also occur when the same types of inventory are located in different warehouses.
- A negative balance can easily occur here when an order is made for goods from the wrong location, resulting in inaccurate inventory records.
- This is called a location-level negative balance.
