Select the one best of the following statements:
A) inventories allow manufacturing to level out production and to satisfy peak demand
B) inventories allow manufacturing to reduce production runs, reducing unit cost
C) inventories allow manufacturers to operate different work centers at the same output
D) all the above are true
E) none of the above is true

Question

Quizplus · Accepted Answer

Inventory allows manufacturing to level out production and satisfy peak demands by having a buffer of finished goods on-hand. It may also allow for some reduction in production runs, which can help reduce unit costs, but this is not its primary purpose. Additionally, inventories do not necessarily enable manufacturers to operate different work centers at the same output level. Therefore, statement A is the best choice as it accurately reflects the primary purpose of inventory in manufacturing.

Select the One Best of the Following Statements