According to you, what are the three basic reasons for keeping an Inve

1.	According to you, what are the three basic reasons for keeping an Inventory?
Answer» The three basic reasons for keeping the inventory are: 1. TIME- The time lag present in the supply chain, from the supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this lead time. However, in practice inventory is to be maintained for consumption during variation in lead time. Lead time itself can be addressed by ordering that many days in advance. 2. Uncertainty- Inventories are maintained as buffers to meet uncertainties in demand, supply and movement in goods. 3. Cost effectiveness- Ideal condition of “one unit at a time at a place where user needs it, when he needs it” principle tend to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in cost effectiveness, thus inventory is needed

According to you, what are the three basic reasons for keeping an Inventory?

Answer»

The three basic reasons for keeping the inventory are:

1. TIME- The time lag present in the supply chain, from the supplier to user at every stage, requires that you maintain certain amounts of inventory to use in this lead time. However, in practice inventory is to be maintained for consumption during variation in lead time. Lead time itself can be addressed by ordering that many days in advance.

2. Uncertainty- Inventories are maintained as buffers to meet uncertainties in demand, supply and movement in goods.

3. Cost effectiveness- Ideal condition of “one unit at a time at a place where user needs it, when he needs it” principle tend to incur lots of costs in terms of logistics. So bulk buying, movement and storing brings in cost effectiveness, thus inventory is needed

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