The Need for Safety Stock Can Be Reduced by an Inventory

question 80

Multiple Choice

The need for safety stock can be reduced by an inventory planning strategy which:

• A)increases lead time.
• B)increases lead time variability.
• C)increases lot sizes.
• D)decreases ordering costs.
• E)decreases lead time variability.

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Definitions:

Price Level

The overall cost of goods and services expressed as an index, which helps to compare different periods' economic conditions.

Long-Run Aggregate Supply

The total amount of goods and services produced in an economy at full employment, unaffected by price levels in the long term.

Nominal Wage

The wage that is paid to workers in current dollars, without adjustment for inflation.

Capital Stock

The total amount of physical, human, and intellectual capital that a country possesses at any given time.