It is costly to hold inventory, but inventory can also be useful in a process because a. adding inventory to a process will shorten the average time a unit spends in a process. b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand. c. adding inventory to a process is likely to increase quality. d. adding inventory to a process will increase the profit margin of the item.

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Answer 1

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $18,750 to purchase or (2) a used sedan that would cost $12,750.They anticipate that the new subcompact would get 37 miles per gallon (combined highway and around town driving) while the sedan would get 26 miles per gallon. Based on their road tripping history they expect to drive 13,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $2.93 per gallon.Question: How many miles would the Ricks need to drive before the cost of these two options would be the same? (Display your answer to the nearest whole number.) (Hint:…

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Answer 2

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 3

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 4

Textbook Question

Chapter 10, Problem 1CQ

It is costly to hold inventory, but inventory can also be useful in a process because

a. adding inventory to a process will shorten the average time a unit spends in a process.
b. adding inventory to a process can help reduce situations in which sales are lost due to uncertain demand.
c. adding inventory to a process is likely to increase quality.
d. adding inventory to a process will increase the profit margin of the item.

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 8

Expert Solution & Answer

Summary Introduction

To determine: The advantage of using inventory.

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To determine: The advantage of using inventory.

Answer 12

Explanation of Solution

Determine the advantage of using inventory:

Even though holding inventory costs for the firm, it will be useful for the company to avoid stock-outs. Adding inventory helps the firm to manage the situation in which the products go out-of-stock due to uncertain demand. It might lead to loss of sales. Adding inventory helps to avoid this.

Hence, option (b) is correct and options (a), (c), and (d) are incorrect.

Answer 13

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