Which of the following ‘wastes’ is being removed from the business?

Agile Cars Ltd is creating a ‘lean’ business model which involves receiving deliveries of components only when they are required .

Which of the following ‘wastes’ is being removed from the business?
A . Transportation
B. Defects
C. Over-production
D. Inventory

View Answer

Answer: D

Explanation:

This would reduce inventory (holding stock). Inventory is considered a business waste because it costs money to store stuff (e.g. paying the rent on a warehouse, electricity to light it up etc). If you can reduce the need to store materials and components on site- you reduce costs. You also save time because you get deliveries when you need them- you don’t need to allow for staff unpacking things, storing them away, then going back to them later when they need them. For more information on the 7 Business Wastes see p.70. This comes up in a couple of modules, so it’s worth remembering.