Case Study: ABC Electronics Pvt$.$ Ltd$.$

ABC Electronics Pvt$.$ Ltd$.$ is a medium$-$sized company that manufactures consumer electronic items like LED TVs and smart speakers. In recent months, the company has been facing challenges such as frequent stockouts of raw materials, delayed customer orders, and increasing production costs. An internal audit revealed that there was no proper forecasting model in place, and the inventory system was outdated. As a result, operations were not aligned with actual market demand. The Operations Manager has now proposed implementing a modern inventory control system and integrating demand forecasting tools to improve efficiency and reduce costs.

$$ Question $($based on the case study$)$:

In the context of Operations Management, what is the most appropriate reason for ABC Electronics to implement a new inventory control and forecasting system?

A$)$ To increase marketing reach and branding

B$)$ To reduce employee working hours

C$)$ To align production with demand and optimize resource usage

D$)$ To eliminate the need for raw materials altogether