Many Companies Use Just-In-Time Inventory Methods

question 127

Multiple Choice

Many companies use just-in-time inventory methods.Which of the following is not an advantage of this method?

• A)It limits the risk of having obsolete items in inventory.
• B)Companies may not have quantities to meet customer demand.
• C)It lowers inventory levels and costs.
• D)Companies can respond to individual customer requests.

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Definitions:

Auction Market

A marketplace in which buyers and sellers express their prices through bids and offers, and transactions occur at prices where supply and demand meet.

OTC Market

Over-the-counter market, a decentralized market where securities not listed on major exchanges are traded directly between parties.

Dealer Market

A financial market mechanism wherein buyers and sellers of securities conduct transactions through dealers who buy and sell for their own account.

Primary Market

The segment of the capital market where new securities are issued and sold to initial buyers, typically involving underwriting processes.