A characteristic typical of an effective inventory management system is
A.
an excessively small inventory level to minimize costs
B.
a sufficient quantity of goods is kept on hand and reordering is performed when necessary
C.
holding only enough inventory to fill half of the demand
D.
maintaining an inventory level that fills storage space to capacity
The Answer Is:
B
This question includes an explanation.
Explanation:
Effective systems balance service level and cost. They maintain enough stock to meet demand through lead time (with safety stock where appropriate) and trigger timely reorders using methods like reorder points, EOQ, or min/max. Extremes—chronic under-stocking (stockouts) or over-stocking (excess carrying cost, obsolescence)—are specifically cautioned against in CLT guidance.
[References: MSSC CLT 4.0 — Inventory Control: Service Levels, EOQ, Min/Max; Replenishment Triggers and Safety Stock., ===========]
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