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Which of the following statements is true:
1) Inventory should be kept to a minimum
2) All machines should be working with 100% efficiency.
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On the website aCOWtancy, the ans is 1 statement and in the exam kit its 2 statement, and from what I have studied it should be none, as ofc the 2nd statement is obv wrong, for statement no. 1 my opinion is that inventory is ignored and there is no force of having inventory being minimum, yes throuput follows JIT and TQM principels of 0 to very minimum inv, or minimum inv in short run like day to day and no or v minimum inv in long run. Which makes me wonder that stat 1 may actually be correct as throuput focuses on short-term. This is very confusing as I cant make whether non is correct or 1 is correct.
All Help is appreciated, tyvmStatement 1 is true. As inventory should be kept to a minimum in throughput accounting. It is assumed that inventory levels are kept as low as possible, ideally at zero or as low as possible in the real world. The goal is to avoid holding excess inventory and minimize inventory holding costs.
Statement 2 is false. The machines should be working with 100% efficiency is untrue because different machines and processes have different capacities.
It is more important for a business to focus on the bottleneck resource and ensure its efficiency rather than aiming for 100% efficiency across all machines.
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