All of the Following Are Potential Benefits of Better Forecasts

question 22

Multiple Choice

All of the following are potential benefits of better forecasts except?

• A) Higher inventory levels
• B) Reduced stockouts
• C) Smoother production plans
• D) Reduced costs

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Definitions:

Obsolescence Cost

Obsolescence cost refers to the loss of value of an asset due to technological advancements, changes in market demand, or regulatory changes.

Economic Order Quantity

A formula used to determine the most cost-effective quantity to order to minimize the costs of holding and ordering inventory.

Inventory Costs

Expenses associated with managing and holding inventory, including storage, insurance, taxes, and potential obsolescence.

Total Inventory

The total amount of goods and materials held in stock by a business at a given time, including raw materials, work-in-progress, and finished goods.