Levenworth Company incurs unnecessary costs each period because of the excess quantities of inventory maintained to meet unexpected customer demand.The costs of inventory financing,storage,supervision,and obsolescence could most likely be reduced by which of the following practices?
A) Activity-based costing
B) Just-in-time inventory
C) Total quality management
D) Benchmarking

Question

Quizplus · Accepted Answer

Just-in-time inventory is a practice where inventory is only ordered and received when it is needed in the production process or to fulfill customer orders. This can reduce excess inventory and therefore decrease the costs associated with financing, storing, supervising, and obsolescence. Activity-based costing, total quality management, and benchmarking may also help to identify areas to reduce costs, but they do not directly address the issue of excess inventory.

Levenworth Company Incurs Unnecessary Costs Each Period Because of the Excess