In a traditional inventory system
A)inventory is stockpiled in large amounts.
B)inventory is ordered just in time to be put into production.
C)the marketing manager determines how much inventory should be in stock.
D)the cost of carrying inventory is no more than with a JIT system.

Question

Quizplus · Accepted Answer

In a traditional inventory system, inventory is stockpiled in large amounts, which means that the company orders and keeps large quantities of raw materials, work in progress, and finished goods in inventory to meet the expected demand. This system is commonly used in companies that produce standardized products or items with constant demand since it allows them to avoid stockouts and ensure a steady supply of goods. However, it also comes with high inventory holding costs, such as storage, insurance, and obsolescence, which increase the overall cost of production.

In a Traditional Inventory System