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SHORT ANSWER: INVENTORY/PRODUCTION PROCESS

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Explain how inventory can act as a buffer in the production process. Discuss why it is sometimes prudent not to order the minimum level required to obtain a quantity discount.

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Solution Summary

Inventory and production processes are examined.

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Inventory can be either stored finished product waiting shipment to distribution or end users. It can also be resources and materials used in the production process. In either case, the use of inventory as a buffer, gives a company options if there are issues during the production of product.

Inventoried materials can help buffer the company if there are delays in resource delivery or issues getting resources. A ...

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