Carrying Insufficient Quantities of Inventory on Hand

question 88

Multiple Choice

Carrying insufficient quantities of inventory on hand:

• A) can inadvertently lower a company's costs so much that its taxes become excessive.
• B) can cause customers to go elsewhere to obtain the product.
• C) has little effect on customer satisfaction.
• D) will increase the costs of carrying inventory.

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Definitions:

Waiting-Line System

A model used to analyze the flow of customers, tasks, or items through a queue or waiting period, optimizing service efficiency.

M/M/1

A basic model in queueing theory representing a system with a single server, where arrivals and service times are both exponential (Markovian), and there is a single queue.

Arrival Rate

In queuing theory, the average rate at which tasks, customers, or entities arrive at a service station or system.

Queuing System

The method by which queues of customers or items are managed by an entity, focusing on order service, wait times, and allocation of resources.