Hanson Technology is a computer manufacturer. For years, Hanson has relied on the JIT inventory method. However, due to numerous recent stockouts by Hanson's suppliers, Hanson's management has decided to transition to the traditional inventory method. How will Hanson's inventory levels change as a result of this switch?

A:

Hanson's levels of finished goods and raw materials will all decrease but work in process will remain the same.

B:

Hanson's levels of finished goods, work in process, and raw materials will all increase.

C:

Hanson's levels of finished goods, work in process, and raw materials will all decrease.

D:

Hanson's level of finished goods will increase but raw materials and work in process will remain the same.

Question

Business

Cameron

28 March, 09:43

Hanson Technology is a computer manufacturer. For years, Hanson has relied on the JIT inventory method. However, due to numerous recent stockouts by Hanson's suppliers, Hanson's management has decided to transition to the traditional inventory method. How will Hanson's inventory levels change as a result of this switch?

A:

Hanson's levels of finished goods and raw materials will all decrease but work in process will remain the same.

B:

Hanson's levels of finished goods, work in process, and raw materials will all increase.

C:

Hanson's levels of finished goods, work in process, and raw materials will all decrease.

D:

Hanson's level of finished goods will increase but raw materials and work in process will remain the same.

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Answers (1)

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Dania Mora · Answer 1

Hanson’s levels of finished goods and raw materials will all decrease but work in process will remain the same. This is because of the stockouts by their recent suppliers.