Companies hold a supply of inventory for all of the following reasons EXCEPT:
A)meet variation in product demand
B)increase production change/setup costs
C)allow production scheduling flexibility
D)purchase in bulk to take advantage of quantity discounts
E)maintain independence of operations (Decoupling)

Question

Quizplus · Accepted Answer

Holding inventory does not increase production change/setup costs. In fact, holding inventory can help reduce changeover costs by allowing for longer production runs and more efficient use of machinery. The other options are valid reasons for holding inventory.

Companies Hold a Supply of Inventory for All of the Following