Asked by Evelyn Domingo on May 02, 2024
Verified
Buying raw materials only as they are needed in the manufacturing process will tend to decrease the inventory period.
Raw Materials
Basic substances in their natural, modified, or semi-processed state, used as inputs for a production process for manufacturing goods.
Inventory Period
Inventory Period is the average time it takes for a company to convert its inventory into sales, indicating the efficiency of inventory management and sales processes.
Manufacturing Process
The sequence of operations or procedures used to create a finished product from raw materials in a systematic and standardized manner.
- Understand the consequences of managing inventories on both the cash and operational processes.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
True
Explanation :
This approach, known as Just-In-Time (JIT) inventory management, reduces the amount of time raw materials sit in inventory before being used in production, thereby decreasing the inventory period.
Learning Objectives
- Understand the consequences of managing inventories on both the cash and operational processes.