Please use the scenario below to answer these questions:

1. What do you think could be the reason why Smackey Dog Foods Inc. is getting so many returns?

2. What controls could be put in place to minimize returns?

3. Does it cost a company more than the sales price to process a return?

Smackey Dog Foods Inc. started in the kitchen of Sarah, Kim, and Jillians family home in the suburbs of Chicago. The three sisters initially bought the ingredients for their natural dog food recipes from the local grocery store. They used their dogs and the neighborhood dogs as their taste testers. Their dog food products were so good, the local kennels and veterinary offices were glad to distribute the sisters' products to their customers.

Henry, monitors the production and shipment of Smackey Dog Foods regular line of products. Henry takes pride in his work and is involved in every facet of the operation. With only one other warehouse employee to help, Henry personally is involved in preparing and approving all inventory records. Henry ensures that very little finished inventory sits in the warehouse. However, the shipping dock always seems to be full of returned dog food that should be restocked. When Kim asks him about it, Henry laughs and tells her that "first in, first out" applies to dog food returns as well. Kim smiles and just accepts that answer.