The ABC Method of Inventory Management Is Founded on the Notion

question 125

Multiple Choice

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

• A) some inputs are more valuable or critical to a 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:

Free Energy

The amount of internal energy within a system that is available to perform work, as in chemical reactions and physical processes.

Absorbs

The process of taking in or soaking up energy or material from the environment, such as light, heat, or moisture, through physical or chemical means.

Free Energy

A thermodynamic quantity representing the amount of energy in a system that is available to do work at a constant temperature and pressure.

Reactants

Substances initially present in a chemical reaction that are consumed during the reaction to make products.