In the paint industry, various raw materials are mixed in different proportions with petroleum from manufacturing different kinds of paints. One specific raw material is not readily and regularly available to the paint manufacturing companies. Bonler Paints Company is also facing this problem and because of this there is a time lag between placing the order and the actual receipt of the material. But, once it receives the raw materials, it takes less time in converting it into finished goods.
Identify the factor affecting the working capital requirements of this industry.

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Solution

The factors affecting the working capital requirements of this industry is availability of raw materials and efficiency of operating in the industry. The non-availability of the raw material leads to lag in the production process and affects the efficiency of operating and delivering the paints as per schedule.

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