Question

An overriding, key TRADE OFF to consider in inventory management is

Group of answer choices

how many items to hold in inventory vs. location of the facility.

how often to purchase items vs. how quickly you receive them.

inventory holding costs vs. set up or order costs.

carrying cost vs. warehouse expenses.

None of the above.

Considering inventory, the following statements are true EXCEPT ______.

Group of answer choices

Inventory ties up working capital.

Inventory is an expensive asset.

Inventory is subject to shrinkage.

Inventory balance is reported on a company's income statement.

WIP or work in process is a type of inventory that can be best described as _____.

Group of answer choices

items needed to run the business.

products ready to ship to customers.

items purchased from outside suppliers.

materials that should be disposed of.

materials and parts partially transformed.

Answer 1

Question: An overriding, key TRADE OFF to consider in inventory management is

Answer: inventory holding costs vs. set up or order costs.

As Inventory holding costs increase, set-up or order costs decrease, since more you hold inventory, the less you need to order. The same is valid vice-versa also. Hence, the trade-off between inventory holding costs vs. order costs is key consideration in inventory management.

Question: Considering inventory, the following statements are true EXCEPT ______.

Answer: Inventory balance is reported on a company's income statement.

Inventory balance is reported on a company's balance sheet and not on company's income statement.

Question: WIP or work in process is a type of inventory that can be best described as _____.

Answer: materials and parts partially transformed.

Work-in-process are items which are being worked upon and are yet to completed or finished into a completely transformed product. Hence, these are items which are partially transformed.