John Chose to Buy a Pizza

question 169

Multiple Choice

John chose to buy a pizza. If he had not bought the pizza, he would have bought either a hot dog or a burger. John's opportunity cost of buying the pizza is:

• A) the hot dog
• B) the burger
• C) both the burger and the hot dog
• D) whichever alternative, the hot dog or the burger, has the next highest value to John

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Definitions:

Carrying Inventory

The practice of holding goods in stock, representing a current asset on a company's balance sheet.

Running Out Of Inventory

A situation where a business depletes its stock of products, potentially leading to missed sales opportunities and customer dissatisfaction.

Materials Requirement Planning

A production planning, scheduling, and inventory control system used to manage manufacturing processes.

Just-In-Time Inventory

An inventory management strategy that aligns raw-material orders with production schedules to minimize inventory costs and reduce waste.