Which of the following statements represents the primary function of inventory?
A) Make products available while minimizing total carrying cost
B) Realize economies of scale while minimizing total carrying cost
C) Reduce ordering cost while minimizing total carrying cost
D) Buffer against delivery time while minimizing total carrying cost

Question

Quizplus · Accepted Answer

The primary function of inventory is to buffer against delivery time while minimizing total carrying cost. This means that inventory serves as a buffer between the time a customer places an order and the time the order is actually received, reducing the impact of delivery time on customer satisfaction. Minimizing total carrying cost is important to ensure that the benefits of holding inventory outweigh the costs associated with doing so. Choices A, B, and C are not the primary function of inventory but rather secondary objectives that may be achieved through effective inventory management.

Which of the Following Statements Represents the Primary Function of Inventory