Reducing the Number of Warehouses Should, According to the Square

question 12

Multiple Choice

Reducing the number of warehouses should, according to the square root rule, have what effect on the total inventory in the system?

• A) Decrease
• B) Increase
• C) Neither decrease nor increase
• D) Cannot be determined from the information given

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Definitions:

Medium of Exchange

An intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

Measure of Value

A function of a medium of exchange that allows it to serve as a common denominator to express the value of goods and services.

Demand Deposits

Bank accounts from which deposited funds can be withdrawn at any time without any notice to the institution, such as checking accounts.

Fed

Refers to the Federal Reserve System, which is the central banking system of the United States, responsible for monetary policy.