Practice Quiz

Supply Chain Management

Category - Efficiency

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What are the three most important ways a firm can create a buffer against the amount of demand for particular goods?
  1. Shipping, inventory, and warehouse.
  2. Inventory, machinery, and retailer.
  3. Inventory, capacity, and time.
  4. Shipping, raw material, and time.
Explanation
Answer: C - Precautionary inventory, extra storage space, and safety lead time all create a time buffer needed to act accordingly when faced with a demand fluctuation. These are the three principal ways to protect against fluctuation in the amount of demand.
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