Which of the Following Best Describes Just-In-Time Inventory Management

question 115

Multiple Choice

Which of the following best describes just-in-time inventory management?

• A)Inventory is maintained as a buffer to meet uncertainties in demand,supply,and movements of goods.
• B)Production inefficiencies arising when production capacity stands idle for lack of materials are minimized by holding a small stock of essentials at all times.
• C)A firm acquires inventory precisely when needed so that its inventory balance is always at,or close to,zero.
• D)A firm minimizes the time lags present in the supply chain by maintaining a certain amount of inventory to use in these lag times.
• E)A firm acquires inventory only once customers have placed orders for their product.

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Definitions:

Current Assets

Holdings that are projected to be liquidated, traded, or used up within twelve months or over the course of the operating cycle, depending on which timeframe is more extended.

Current Liabilities

Financial obligations or debts that a company is expected to settle within one year or within its operating cycle.

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, preparing the books for the next period.

Depreciation Expense

This is an accounting method used to allocate the cost of a tangible asset over its useful life.