Read the scenario below and answer the questions that follow:

Transformation Choices On a quest to transform her body and her life, Shirley started working out, and to supplement her diet, she started making smoothies for herself. To save time and effort, she started making the smoothies in bulk and freezing them, so that she has an adequate supply for a week. Rea, one of the ladies in her workout group asked Shirley one day about how she was managing to lose weight so effectively and Shirley informed her of the diet change and the smoothies that have become part of her routine. Upon hearing about the smoothies, Rea suggested that Shirley sell some of them to her. Shirley always marvels at how silly this discussion seemed in the beginning, but three years later, she had registered her business, Transformation Choices, and she had converted her garage into a makeshift operations centre and an office; she is now dispatching smoothies to the entire Krugersdorp area, and demand is spreading throughout Gauteng. Shirleys smoothies have taken off and she is now a full-fledged entrepreneur; therefore, she is moving her operations onto bigger premises, so that she can set up her business and formally implement supply chain practices. Shirley has realised and acknowledges that it is critical to implement inventory management, transportation management, warehousing, forecasting and operations practices, to grow her business effectively and deliver her goods efficiently.

Q.1.1 Explain below 5 benefits of an inventory management system, in relation to a growing business like Transformation Choices.

1. The organisation is able to know almost exactly which stock item, and how many of these stock item the customer requires

2. Inventory levels are kept to an optimum level, allowing the organisations operations to function

3. Lowest possible total operating costs are achieved

4. Unnecessary inventory holding is minimised, therefore holding Coast are reduced

5. There are decrease the levels of obsolete