An Inventory System That Attempts to Cut Inventory Carrying Costs

question 56

Multiple Choice

An inventory system that attempts to cut inventory carrying costs by reducing inventory to an absolute minimum is known as a(n) ____.

• A) ABC inventory analysis
• B) LIFO - last in-first out system
• C) just-in-time inventory system
• D) FIFO - first in-first out system

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Definitions:

Long Run

A period in which all factors of production and costs are variable, enabling full adjustment to change.

Short Run

A period in which at least one input in the production process is fixed, and only some inputs can be adjusted by firms.

Decreasing Costs

A situation where the total cost of production decreases as the volume of production increases.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, inversely related to normal goods.