Reference no: EM133578163

Question: Waterless Ltd is a Mumbai-based raincoat-making company. Raincoats have extremely high demand in Mumbai and its suburbs owing to the prolonged rainy season. However, the demand for raincoats is extremely seasonal in nature and completely depends on the arrival of monsoons. As soon as the monsoons hit the shores of India, the sales of raincoats skyrocket. When the sales of raincoats start booming, the demand for raw material required in the manufacturing of raincoats, i.e., waterproof fabrics also increases. When this happens, the raincoat manufacturing process takes a hit due to shortage of raw material and so do the raincoat sales. The exact date when the monsoon hits the country is not known and thus, manufacturers are afraid of stocking excessive raw material beforehand. Being in the business for many years now, Waterless Ltd is aware of this cycle. To overcome it, the company studies the weather conditions through sophisticated tools and starts to predict the arrival of monsoons with high accuracy. The company then orders raw material only a few days before the monsoon arrival date as is calculated by its sophisticated tools. Based on this scenario, under which motive has Waterless Ltd decided to purchase the inventory?