BM2 2.02 Types of Inventory part 2

What is the primary purpose of inventory management in business?

• To increase product prices

• To ensure operational efficiency

• To eliminate the need for warehouses

• To create more intangible inventory

Which of the following is an example of intangible inventory?

• Steel used in car manufacturing

• A trademark for a popular brand

• Finished goods in a warehouse

• Spare parts for machinery

A manufacturer of furniture keeps large quantities of wood in stock. What is the primary benefit of this decision?

• Reducing storage costs

• Ensuring production continuity

• Eliminating the need for MRO supplies

• Avoiding the need for finished goods inventory

A company specializing in electronics has a high amount of work-in-process inventory. What is the potential challenge associated with this?

• Increased storage costs

• Risk of intellectual property theft

• Difficulty in marketing the product

• Ensuring employee safety

A car manufacturer must balance raw materials, work-in-process inventory, and finished goods. Which decision best demonstrates effective inventory management?

• Keeping no inventory to minimize costs

• Increasing finished goods storage while ignoring raw materials

• Aligning inventory levels with production schedules and market demand

• Eliminating work-in-process inventory to simplify management

An international supplier experiences shipping delays. How might this affect transit inventory?

• Decrease in overall inventory costs

• Increase in transit inventory levels

• Elimination of the need for finished goods storage

• Reduction in work-in-process inventory

A company decides to store fewer raw materials due to cost concerns. What could be an unintended consequence of this decision?

• Lower storage expenses but potential production delays

• Increased production speed due to reduced complexity

• Elimination of the need for MRO goods

• Improved customer satisfaction through faster delivery

A business has excess finished goods but struggles with sales. What strategy could best address this issue?

• Increase marketing efforts to boost demand

• Reduce transit inventory to cut costs

• Invest in more raw materials to increase production

• Focus only on intangible inventory

Match the type of tangible inventory with its description: