A well designed high-volume system will minimize _________ inventory and reduce _____________for the product or service.
A) work-in-process, throughput time
B) raw material, storage capacity
C) finished, throughput time
D) work-in-process, storage capacity
E) finished, transportation cost

Question

Quizplus · Accepted Answer

A well designed high-volume system aims to have the highest possible throughput with the least amount of inventory. Therefore, it would minimize work-in-process inventory and reduce throughput time for the product or service. Option B is not a good choice because raw material inventory is necessary for production, and reducing it may result in shortages. Option C is not ideal because finished inventory ties up resources and ties up capital in the form of inventory costs. Option D is partially correct, but finished goods inventory is still expensive to maintain and increases the possibility of waste. Option E is not specific enough and misses the point of reducing inventory and reducing the cost of the product/service.

A Well Designed High-Volume System Will Minimize _________ Inventory and Reduce