ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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cycle Inventory = lot size x 2
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cycle Inventory = Q*2
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cycle Inventory = Q/2
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cycle Inventory = lot size = Q
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Detailed explanation-1: -Lot sizes and cycle inventory do not affect the flow time of material within the supply chain. Average flow time resulting from cycle inventory = Cycle Inventory/Demand = Q/2D. Cycle inventory is primarily held to take advantage of economies of scale in order to reduce profit within the supply chain.
Detailed explanation-2: -Cycle inventory is the products, materials or raw ingredients that a company keeps to fulfill its minimum production quotas. Cycle inventory is crucial to the company’s operations because regular business operations use or “cycle” the inventory frequently.
Detailed explanation-3: -Why Is Cycle Stock Important to Businesses? Cycle stock plays an important role in a business’s daily operations because it’s used to fulfill most sales orders. Without it, a company would not have enough inventory available to meet customer demand and the business would not last long.