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Jemshah
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Asked: 2023-01-21T07:48:09+00:00 In:

Explain five likely adverse consequences to an organization that fails to properly classify its goods.(10 marks)November 2022

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Explain five likely adverse consequences to an organization that fails to properly
classify its goods.(10 marks)November 2022

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  1. Enlightened
    1. Incorrect tax liability: Improper classification of goods can result in the organization being liable for incorrect taxes, such as tariffs, import/export duties, and value-added taxes. This can lead to financial penalties and fines.
    2. Compliance issues: Improper classification of goods can result in non-compliance with laws and regulations, such as customs regulations and trade agreements. This can lead to legal issues and fines.
    3. Difficulty in obtaining insurance: Improper classification of goods can make it difficult for an organization to obtain insurance coverage for the goods, which can result in financial losses in case of damage or loss of goods during transportation.
    4. Difficulty in forecasting demand: Improper classification of goods can make it difficult for an organization to forecast demand for the goods, which can negatively impact the ability to meet customer requirements.
    5. Difficulty in managing inventory: Improper classification of goods can make it difficult for an organization to manage inventory levels, which can result in stockouts or overstocking of goods.
    6. Difficulty in identifying patterns: Improper classification of goods can make it difficult for an organization to identify patterns and trends in sales, which can negatively impact the ability to make informed business decisions.
    7. Difficulty in providing technical assistance: Improper classification of goods can make it difficult for an organization to provide technical assistance to customers, which can negatively impact customer satisfaction.
    8. Difficulty in tracking goods: Improper classification of goods can make it difficult for an organization to track goods, which can negatively impact the ability to manage and monitor the warehouse operations effectively.
    9. Difficulty in providing accurate financial reports: Improper classification of goods can make it difficult for an organization to provide accurate financial reports, which can negatively impact the ability to make informed business decisions.
    10. Reputation damage: Improper classification of goods can damage the reputation of the organization, which can negatively impact customer loyalty, sales and future business opportunities.
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