Question

If the manufacturing lead time of an item is reduced by 50%, the work in process inventory:

A. Increases
B. Decreases
C. Remains unchanged
D. Becomes obsolete

Answer 1

If the manufacturing lead time of an item is reduced by 50%, the work in process inventory decreases.

Step-by-step explanation:

If the manufacturing lead time of an item is reduced by 50%, the work in process inventory decreases. Manufacturing lead time refers to the time it takes for a product to go through the production process, from raw materials to finished goods. When the manufacturing lead time is reduced, it means the production process is more efficient and faster, resulting in less work in process inventory. For example, if it originally took 10 days to produce an item, reducing the lead time by 50% would mean it now takes 5 days, resulting in a decrease in work in process inventory.