3.

Just-in-time inventory systems are designed to minimize

the cost of storage space.

the cost of waste.

opportunity cost.

all costs identified in the choices provided in this problem.

4.

The Bake Shop (TBS) buys and sells cakes. To preserve freshness TBS donates cakes that have not been sold within 5 days to charitable organizations. To avoid waste TBS usually orders fewer cakes than it can sell. Sold out signs are frequently seen in the store. Even so, the cakes come in several flavors and occasionally some of the flavors do not sell out before the 5 day shelf life expires. Cakes cost $8 each to purchase and are sold for $14 each. During the most recent month TBS had customer orders for 20 cakes that could not be filled due to a lack of inventory. There were only 4 cakes that had to be donated to charity during the month. Based on this information the

cost of waste amounted to $56.

opportunity cost amounted to $80.

cost of waste amounted to $160.

opportunity cost amounted to $120.

1.50 points Companies that start a just-in-time inventory system are seeking to O reduce the size of the inventory they carry. O avoid the need to provide customized products O increase the size of the inventory they carry. O maintain their normal inventory levels. References eBook & Resources Multiple Choice Learning Objective: 01-03 Show how just-in-time inventory can increase profitability. Ask your instructor a question 2. 1.50 points Which of the following is not a cost associated with holding inventory? O The cost of obsolescence. The cost of customizing products. O The cost of theft. O The cost of warehouse space. References eBook & Resources Required information Required information