Which of the following is correct? Adding inventory increasesGroup of answer choicesSupply chain delaysInventory riskReceivables riskSupply chain disruptions
Question
Which of the following is correct? Adding inventory increasesGroup of answer choicesSupply chain delaysInventory riskReceivables riskSupply chain disruptions
Solution
Adding inventory increases both supply chain delays and inventory risk.
-
Supply Chain Delays: When you add more inventory, it takes longer to move items through the supply chain. This is because there are more items to handle, store, and transport.
-
Inventory Risk: With more inventory, there is a higher risk of items becoming obsolete or damaged. There is also a greater financial risk because more money is tied up in stored goods.
Adding inventory does not necessarily increase receivables risk or supply chain disruptions. Receivables risk is related to customers not paying their bills on time, and supply chain disruptions are typically caused by unforeseen events like natural disasters or supplier issues.
Similar Questions
Which of the following is incorrect? Adding capacity reducesGroup of answer choicesProcurement riskInventory riskCapacity riskSupply chain delays
Which of the following supply chain disruption risk mitigation strategies can also improve supply chain cost efficiency?Group of answer choicesAdding capacity at different locationsReducing supply chain complexityHaving multiple suppliersIncreasing inventory levels
Which category of supply chain risk results from a mismatch between a company’s projections and actual demand?Group of answer choicesSystems riskInventory riskForecast riskCapacity risk
Which of the following is not affected by decisions about how much inventory to hold?
Which category of supply chain risk results from unanticipated increases in acquisition costs resulting from fluctuating exchange rates or supplier price hikes?Group of answer choicesProcurement riskReceivables riskDelay riskForecast risk
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.