APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 108

Which of the following statements represents the primary function of inventory?

Answer options

• A. Make products available while minimizing total carrying cost
• B. Realize economies of scale while minimizing total carrying cost
• C. Reduce ordering cost while minimizing total carrying cost
• D. Buffer against delivery time while minimizing total carrying cost

Correct answer: D

Explanation

The correct answer, D, emphasizes the role of inventory in protecting against delivery time fluctuations, which is crucial for maintaining service levels. Options A, B, and C focus on cost minimization but do not address the critical function of inventory in managing supply chain uncertainties.