Question

Which of these statements about cycle inventory is​ BEST? A. Cycle inventory exists to avoid customer service problems. B. Cycle inventory is used to compensate for cycles in supply or demand. C. A change in lead time does not necessarily entail a change in cycle inventory. D. Longer lead times entail more cycle inventory is needed.

Answer 1

Answer:

A. Cycle inventory exists to avoid customer service problems.

Explanation:

Cycle inventory is the part of inventory kept by a supplier, that shows the amount of inventory available to satisfy demand. Cycle inventory allows the supplier to keep track of his available inventory so as to remove the problem of not meeting customers demand, which can led to loss of customers. And also to reduce the problem of over-storage that can lead to additional holding charge.