APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 89

Which of the following statements best describes the primary objective of most warehouses?

Answer options

• A. Provide additional storage to excess inventory and avoid its disposal
• B. Ensure that inventory levels are in accordance with the company's financial target
• C. Accurately reflect the company's working capital status
• D. Facilitate the movement of goods through the supply chain to the end consumer

Correct answer: C

Explanation

The correct answer is C because warehouses primarily serve to maintain an accurate representation of a company's working capital, which is crucial for financial health. Options A and B focus on storage and financial targets, while option D emphasizes goods movement, which, while important, is secondary to accurately reflecting working capital.