The inventories should be allocated for the following reasons: The product that has to be sent to the customers cannot be derived without placing the inventory. There is no proper system to assign an inventory to an order once an order is placed. The allocation of inventory can be done in an information system which 'blocks' reassigning the same product repeatedly to other customers. This will also provide the firm more accurate counts to know when to purchase more goods of products that are running out or are low in inventory. Another reason is that it will assist the management to determine where goods are going and to whom. This can help them better work through credit terms with more frequent customers and reward them for repeat purchases.