COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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maximum customer service and low-cost plant operation
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low-cost plant operation and cash flow
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maximum inventory investment and customer service
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high cash flow and profitability
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Detailed explanation-1: -Objectives of Inventory Control To keep inactive, waste, surplus, scrap and obsolete items at the minimum level. To minimize holding, replacement and shortage costs of inventories and maximize the efficiency in production and distribution. To treat inventory as investment which is risky.
Detailed explanation-2: -These mutually conflicting objectives of inventory management can be explained is from of costs associated with inventory and profits accruing from it low quantum of inventory reduces costs and high level of inventory saves business from being out of stock & helps in running production & sales activities smoothly.
Detailed explanation-3: -To ensure the quality of goods at reasonable prices. To facilitate furnishing of data for short and long-term planning with a controlled inventory. To supply the required material continuously. To maintain a systematic record of inventory.