Which of the following is not a function of inventory? o a. to minimize disruptions in the production process ob. to provide selection of goods for anticipated customer demand o c. to increase total invested capital o d. to leverage discounts for buying in bulk concept question 5.5 a firm's probability of a stockout for a popular item is 2%. given this information, what is its service level for this popular item? o a. 2% ob. 98% oc. 4% o d. 96%

1.  C. To increase total invested capital

2. B. 98%

Explanation:

(1). An organization monitors its inventory to ensure it has enough quantity of raw materials, so the production process is not disrupted.

Also when an organization purchases inventory in bulk, it gets a discount on the purchase price.

An organization also manages its inventory to ensure it has a range of goods available in anticipation of customers' demands.

Inventory does NOT increase the total amount of capital invested.

(2). Probability (risk) of stockout = 2% = 0.02

Service level = 1 - stockout risk

Service level = 1 - 0.02 = 0.98 = 98%

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