The ABC Method of Inventory Management Is Founded on the Notion

question 96

Multiple Choice

The ABC method of inventory management is founded on the notion that

• A)some inputs are more valuable or more critical to the firm's operations than others.
• B)inventory costs should be cut to an absolute minimum by reducing inventory on hand.
• C)a firm should know its economic order quantity at all times.
• D)the cost of placing an order is a fixed cost.

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Definitions:

Standard of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.

Technological Improvements

Advances in technology that enhance productivity, efficiency, or quality in goods and services.

Long Run

In economics, the Long Run is a period during which all factors of production and costs are variable, allowing for full industry adjustment to changes.

Per-worker Production Function

A mathematical representation showing how the amount of output produced per worker varies with the amount of capital or other inputs used per worker.