Final answer:
The total warehouse inventory in a warehouse management system is calculated as the sum of the inventory in the interim storage areas and warehouse bins, option A. This inventory system helps in maintaining efficiency like Amazon's cost-friendly, automated warehouses.
Step-by-step explanation:
The correct answer to the student’s question is A. Interim storage areas and warehouse bins. In a warehouse management system, the total inventory is usually calculated by adding together the quantities found in the interim storage areas, where goods may be temporarily placed before being moved to their final location, and the warehouse bins, which are the specific locations within the warehouse where items are stored on a more permanent basis.
When dealing with a procurement process in warehouse management, it is essential to maintain accurate inventories to ensure prompt delivery and low costs, much like Amazon does with its vast, highly computerized warehouses. The company utilizes economies of scale to maintain lower average costs per sale, demonstrating the efficiency and effectiveness of this approach.
Understanding how inventory is calculated is crucial for maintaining an efficient procurement process and can lead to significant cost savings for a business, such as those experienced by Amazon through its use of large, centralized warehouses in low-rent areas and the automation of many of its processes.