It is costly to hold inventory, but inventory can also be useful in a process because a. adding inventory to a process will shorten the average time a unit spends in a process. b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand. c. adding inventory to a process is likely to increase quality. d. adding inventory to a process will increase the profit margin of the item.

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Answer 1

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Students have asked these similar questions

It is costly to hold inventory, but inventory can also be useful in a process because:a. adding inventory to a process will shorten the average time a unit spends in a process.b. adding inventory to a process can help reduce situations in which sales are lost due touncertain demand.c. adding inventory to a process is likely to increase quality.d. adding inventory to a process will increase the profit margin of the item.

The definition of work-in-process (WIP) inventory is: Select one: a. An end item ready to be sold, but still an asset on the company's books. b. Products or components that are no longer raw materials but have not yet become finished products. c. Materials for maintenance, repair and operation. d. Materials that are normally purchased but have not yet entered the manufacturing process. and. Additional stock to allow for uneven demand; a buffer.

The extra inventory we keep just in case the replenishment is delayed is referred to as Group of answer choices a)customer service inventory b)unanticipated excess inventory c)safety stock d) unexplained inventory

Answer 2

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 3

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 4

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 8

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To determine: The advantage of using inventory.

Answer 12

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 13

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