Which of the Following Does NOT Describe the Benefits of Utilizing

question 33

Multiple Choice

Which of the following does NOT describe the benefits of utilizing distribution centres over direct store delivery?

• A) More accurate sales forecasts are possible when retailers combine forecast for many stores serviced by one distribution centre, rather than doing a forecast for each store.
• B) Distribution centres enable the retailer to carry less merchandise in the individual stores.
• C) The use of distribution centres increases inventory investment systemwide.
• D) The effects of forecast error for the individual stores are minimized and less backup inventory is needed to prevent stockouts.
• E) It is easier to avoid running out of stock or having too much stock in any particular store because merchandise is ordered from the distribution centre as needed.

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Definitions:

Labor

The human effort, including both physical and mental, used in the production of goods and services.

Leisure

Time free from work or duties, often used for relaxation, hobbies, or other personal activities.

Nonlabor Income

Income received that does not originate from employment or working, such as dividends, interest, or rental income.

Wage Rate

The fixed amount of compensation or payment given to an employee by an employer in return for work performed, typically expressed on an hourly, daily, or piecework basis.