Purpose Of Inventory is to: Select one.

D                                                               .

Thanks for the invite ............................  D

The Answer for the above question goes to D- All the above......

Hello Team,

There are five basic reasons for keeping an inventory

1.   Time - The time lags present in the supply chain, from supplier to user at every stage, requires that you maintain certain amounts of inventory to use in thislead time. However, in practice, inventory is to be maintained for consumption during 'variations in lead time'. Lead time itself can be addressed by ordering that many days in advance.

2.   Seasonal Demand: demands varies periodically, but producers capacity is fixed. This can lead to stock accumulation, consider for example how goods consumed only in holidays can lead to accumulation of large stocks on the anticipation of future consumption.

3.   Uncertainty - Inventories are maintained as buffers to meet uncertainties in demand, supply and movements of goods.

4.   Economies of scale - Ideal condition of "one unit at a time at a place where a user needs it, when he needs it" principle tends to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in economies of scale, thus inventory.

5.   Appreciation in Value - In some situations, some stock gains the required value when it is kept for some time to allow it reach the desired standard for consumption, or for production. For example; beer in the brewing industry

All these stock reasons can apply to any owner or product

Also, some authors mentioned several reasons not to keep high inventory levels:[1]

·         Obsolescence: due to progress of technology, the bought inventory for future use may become obsolete.

·         Capital Investment

·         Space Usage

·         Complicated Inventory Control Systems: higher number of inventory items complicates the control and monitoring items.

Regards,

Saiyid

Agree with expert answers. Thanks 

Right answer is D....................

Purpose of Inventory is to maintain uninterrupted supply of input materials, manage variations in demand and supply, Manage Supplier Lead Times. Hence Option D, all of the above is the right answer.

Right answer is d. All the above

The goods that that are available for immediate sale is called finished goods inventory the other two categories are raw material inventory and work in process inventory or products that still going through the production process. in response to above question (d) all above is the best answer 

Answer D is the right answer  ++++++++

b. manage variations in demand and supply