Question

The skillful supply chain manager declared she would not only disaggregate cycle inventory, but she would also aggregate safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory and fast mode when using safety inventory for her product that had:_________-
a. high value and high demand.
b. high value and low demand.
c. low value and high demand.
d. low value and low demand.

Answer 1

Answer:

a. high value and high demand.

Explanation:

Since the skillful supply chain manager declared she would not only disaggregate cycle inventory, but she would also aggregate safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory and fast mode when using safety inventory for her product that had high value and high demand.

Generally, when dealing with the transportation of goods that has high value and high demand, it is necessary and important that manufacturers or suppliers use the fast mode in order to meet up with their consumer's increasing demand. Simply stated, an increase in the demand for goods and services should be met with an increased supply, so as to reach equilibrium.

For the safety inventory, which are extra level of goods carried for the purpose of mitigating consumer demand that exceeds the amount forecasted by the manufacturer or supplier in a given period of time.

She decided, she would use a fast mode of transportation for safety inventory of goods with high value and high demand.

The replenishing cycle inventory involves the process of restocking or resupplying a retailer and distributor, when they place a replenishment order.