Question

The distributor is responsible for keeping Hope Springs' water bottles on store shelves and stocking the company’s vending machines. In turn, Hope Springs needs to make sure that the distributor has adequate inventory to do its job. The inventory that a firm needs to meet average demand is called:

A) Seasonal stock.

B) Pipeline inventory.

C) Anticipative stock.

D) Cyclical inventory.

Answer 1

The inventory needed by Hope Springs to maintain regular supply and meet average demand is called pipeline inventory. It is essential for ensuring that their water bottles are consistently available on store shelves and in vending machines, affecting both distribution strategy and customer satisfaction.

Step-by-step explanation:

The inventory that a firm needs to meet average demand is called pipeline inventory. This type of inventory accounts for the stock required to ensure uninterrupted supply for regular business operations. In the context of Hope Springs, it is crucial that the distributor has an adequate amount of pipeline inventory to maintain a consistent presence of water bottles on store shelves and in vending machines.

Understanding the distribution and inventory management is key in supply chain optimization. It allows companies like Hope Springs to effectively meet customer demand without overstocking or understocking their products. Efficient management of pipeline inventory can significantly impact the success of the company's distribution strategy and overall customer satisfaction.