An Economic Measure That Indicates When the Demands for Two

question 129

Multiple Choice

An economic measure that indicates when the demands for two or more goods are related is

• A)the income elasticity of demand.
• B)the price elasticity of demand.
• C)the substitute elasticity of demand.
• D)the cross elasticity of demand.
• E)the normal elasticity of demand.

---

Definitions:

Safety Stock

Additional inventory held to protect against uncertainties in demand or supply, ensuring sufficient stock is available to meet customer needs.

Service Level

A measure of the quality of service provided, often defined as the percentage of customer demands that are met on time.

Reorder Period

The time interval between placing orders for inventory replenishment to ensure consistent supply without incurring stockouts or excessive holding costs.

Safety Stock

Inventory kept on hand to protect against fluctuations in demand or supply, ensuring that there are sufficient units available to meet customer needs.