Final answer:
The warehouse inventory in procurement consists of goods in storage locations and storage areas, exemplified by Amazon's efficient use of large, computerized warehouses that contribute to economies of scale. The correct option is E.
Step-by-step explanation:
In the context of warehouse management within the procurement process, the warehouse inventory consists of all the goods and materials that are stored in various parts of the warehouse. While there are various places within a warehouse where inventory may be kept, such as interim storage areas, storage sections, or storage areas, the typical components of warehouse inventory are usually the sum of the goods in storage locations and storage areas.
Storage locations refer to specific places within the warehouse designated for holding inventory, which could include shelf locations, bins, or pallet positions. Storage areas are broader spaces within the warehouse where inventory is group based on certain criteria like the type of product or the frequency of access needed.
Amazon’s innovative approach to warehousing reflects an example of how a company can benefit from economies of scale by organizing its inventory in large, computerized warehouses in low-rent locations.
This strategy, which integrates sophisticated technology and a streamlined workforce, results in lower average costs per sale and allows for convenient purchasing with prompt delivery, a competitive edge that traditional bookstores with high-rent retail spaces can't easily match.
Amazon does not simply calculate inventory as the items placed on shelves; it utilizes vast, optimized spaces and leverages technology to keep inventory costs low while maintaining high efficiency.