Inventory needs under a derived-demand inventory system are:
A) primarily dependent upon the competitive demands placed on a firm's suppliers.
B) based on the anticipated demand for the finished product.
C) based on minimizing the cost of restocking inventory.
D) held constant over time.
E) determined by a Kanban system.

Question

Quizplus · Accepted Answer

Derived-demand inventory systems are based on the anticipated demand for the finished product. The inventory needs are determined by the production schedule and the demand for the final product. The inventory is restocked based on these needs, rather than on a set schedule or predetermined inventory level. Therefore, choice B is the correct answer. Choices A, C, D, and E are not accurate in describing the inventory needs under a derived-demand inventory system.

Inventory Needs Under a Derived-Demand Inventory System Are