When There Is Probabilistic Demand in a Multiperiod Model,the Inventory

question 44

True/False

When there is probabilistic demand in a multiperiod model,the inventory level will not decrease smoothly and can fall below 0.

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Definitions:

Net Positive Float

The excess of funds available for use due to the time difference between when a check is deposited and when it clears.

JIT System

Just-In-Time System, an inventory management strategy that aligns raw-material orders directly with production schedules.

Accounts Payable

The amounts a company owes to its suppliers or vendors for goods or services received but not yet paid for; a liability on the balance sheet.

Collections Float

Float created while funds from customers’ cheques are being deposited and cleared through the cheque collection process.