inventory management

Question 1

whats inventory

Answer 1

• raw materials , work in progress and finished goods, held by a firm to enable production

Question 2

3 main types of inv

Answer 2

raw materials
work in progress
finished goods

Question 3

key reasons to hold inventory

Answer 3

• allow for seasonable changes
• provides buffer between production processes
• precaution against delays from supplier

Question 4

adv of low and high inv levels

Answer 4

• low
• low costs e.g storage

high -
no delays, already haveit
- lowering unit costs by ordering bulk
- unexpected changes in demand