When maintaining appropriate inventory level, a purchasing manager should ________.
A) keep the inventory level low, to ensure that the firm's money is not being unwisely invested in excess resources
B) ensure that all orders could be filled quickly, eliminating the need for back orders due to stockouts
C) implement the production plan to acquire the desired amount of finished goods available on time at a low cost
D) maintain adequate amount of inventory on hand at desired times and at a favorable price

Question

Quizplus · Accepted Answer

Maintaining adequate amount of inventory on hand at desired times and at a favorable price ensures that the company can meet demand without incurring excessive costs or delays due to stockouts. Option A is not viable as keeping inventory low may lead to stockouts and lost sales. Option B is only addressing the issue of stockouts but does not take into account the cost and time involved in fulfilling orders quickly. Option C is more relevant to production planning and may not fully address the inventory level requirements.

When Maintaining Appropriate Inventory Level, a Purchasing Manager Should ________