ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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There are various advantages for holding inventory but one of the following is not.
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The organisation can take advantage of discounts from suppliers on quantities purchased.
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In expected demand can be met.
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Inventory can be used to hedge against inflation.
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Opportunity cost is incurred
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Explanation:
Detailed explanation-1: -Holding Inventory reduces risk of production shortages To avoid the risk of shortage of essential components during a big production process, the firm should maintain inventory management. This will prevent the shortage of vital raw materials and components needed to produce goods.
Detailed explanation-2: -Storage cost is not included in the cost of inventory.
Detailed explanation-3: -Rent for space, security, depreciation costs and insurance are among inventory holding costs. As these costs increase, businesses must consider deploying demand planning and demand sensing.
There is 1 question to complete.