Inventories that are built up in advance of a peak selling season, a promotion program or a plant shut-down are known as:
A) lot-size inventories
B) transportation inventories
C) safety stocks
D) anticipation inventories
E) none of the above

Question

Quizplus · Accepted Answer

The question describes inventories that are built up in anticipation of a future event or demand, which is the definition of anticipation inventories. Lot-size inventories are built up to take advantage of economies of scale in production or transportation, transportation inventories are held in transit between locations, and safety stocks are extra inventories held to protect against uncertainties and unexpected events.

Inventories That Are Built Up in Advance of a Peak