Most inventory models attempt to minimize:
A) the likelihood of a stockout.
B) the number of items ordered.
C) total inventory-based costs.
D) the number of orders placed.
E) the safety stock.

Question

Quizplus · Accepted Answer

Most inventory models aim to minimize total inventory-based costs, which usually include holding costs, ordering costs, and stockout costs. While minimizing the likelihood of a stockout, the number of items ordered, or the number of orders placed may be important factors in achieving this goal, the overriding objective is typically to keep costs as low as possible. Safety stock is not typically minimized, as it is intended to provide a buffer against unexpected demand or supply chain disruptions.

Most Inventory Models Attempt to Minimize