Which one of the following best states the primary goal of inventory management?
A)Minimize the number of orders per year
B)Minimize the average inventory level
C)Minimize total inventory costs
D)Minimize the level of inventory for the most expensive items
E)Minimize opportunity costs

Question

Quizplus · Accepted Answer

The primary goal of inventory management is to minimize total inventory costs, which includes ordering costs, holding costs, and stockout costs. Minimizing the average inventory level or the number of orders per year may not necessarily result in lower total inventory costs. Minimizing the level of inventory for the most expensive items or minimizing opportunity costs may be important considerations, but they are not the primary goal of inventory management.

Which One of the Following Best States the Primary Goal