Question

Which of the following is NOT one of the reasons operations managers want to work with their supply chains to viciously cut inventories at every level?

A) Reduce holding costs
B) Increase stockouts
C) Improve responsiveness
D) Enhance product quality

Answer 1

The correct answer is B) Increase stockouts.

Step-by-step explanation:

The correct answer is B) Increase stockouts.

Operations managers work with their supply chains to reduce inventories at every level for several reasons:

1. Reduce holding costs: By cutting inventories, companies can save on storage and carrying costs.
2. Improve responsiveness: By reducing inventories, companies can respond more quickly to customer demand and changes in the market.
3. Enhance product quality: By closely managing inventory levels, companies can minimize the risk of obsolete or expired products and ensure product freshness and quality.

However, the aim is not to increase stockouts. Stockouts occur when a company runs out of stock of a particular item, which can result in lost sales, dissatisfied customers, and damaged reputation.