Question

The auto supply stores in the metroplex use a common database to track inventory and actually have very little in each location. Instead, customer requests are typically met with the reply, "We have some in our depot and can get it here by truck after 5 pm." This is an example of _________.

1) Just-in-time inventory management
2) Centralized inventory system
3) Decentralized inventory system
4) Vendor-managed inventory

Answer 1

The auto supply stores' system described is an example of just-in-time inventory management, which allows for the reduction of inventory costs and improved quality control.

Step-by-step explanation:

The auto supply stores in the metroplex that use a common database to track inventory and rely on delivery from a depot after a customer places a request is an example of just-in-time inventory management. This system minimizes the inventory held at each retail location and relies on rapid replenishment from a central depot or warehouse when needed. This approach, which was widely adopted in the automotive industry during the 1980s

, is designed to reduce storage costs and improve quality control by ensuring parts are delivered as they are needed in the production process. It contrasts with traditional methods, where large quantities of inventory were stored nearby the production plants, and this method can put pressure on wages and benefits due to the resultant competition among suppliers.