The XYZ Retail Corporation has 5,000 employees in the United States that are in charge of inventory and delivery of goods. They have seen a rise in damaged inventory in the last year that has resulted from things that include weather and fire. The company’s risk manager has recommended to the firm’s management that the company should implement a partial retention program for losses to this damaged property.
1. Explain the advantages and disadvantages of a partial retention program to the XYZ retail corporation.
2. Identify the factors that the XYZ retail corporation should consider before it adopts a partial retention program for losses to inventory.
3. If a partial retention program is adopted, what are the various methods the XYZ retail corporation can use to pay for damage to the inventory?
4. Identify two risk-control measures that could be used in the company’s partial retention program for damage to the inventory.
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