The goal of inventory management is to:
A)minimize inventory levels while maintaining an adequate supply of goods to meet customer demands.
B)maintain the highest possible inventory of raw materials and finished goods as buffer stocks.
C)act as an alternative to supply chain management in firms.
D)create regular customer stockouts so that the demand for products increases.

Question

Quizplus · Accepted Answer

The goal of inventory management is to find a balance between carrying inventory to meet customer demands and minimizing inventory levels to reduce costs associated with storage and risk of obsolescence. Maintaining the highest possible inventory levels (B) would cause unnecessary costs and tying up capital, while creating stockouts (D) would result in dissatisfied customers and lost sales. Supply chain management (C) is a broader concept that encompasses inventory management as well as other functions such as logistics, procurement, and supplier management.

The Goal of Inventory Management Is To