Which of the Following Statements Is Incorrect in Relation to a Periodic

question 36

Multiple Choice

Which of the following statements is incorrect in relation to a periodic inventory system?

• A) Smaller safety stock for more critical items is sometimes required for the fixed-interval system.
• B) Vendors bundles many small, low-cost items into a single order and delivery to save costs.
• C) Items are generally of low value therefore larger safety stocks will not pose a significant cost.
• D) If the items are non-critical, even if there is a stock-out, it is not a cause for concern.

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Definitions:

Significance Test

A statistical method used to determine if there is a significant difference between groups or conditions, typically by comparing p-values to predefined significance levels.

Outliers

Observations in a dataset that are significantly different from the other data points, often indicating measurement error, variability in measurement, or a novel discovery.

Alternative Hypothesis

In statistics, the hypothesis that proposes there is a difference between two or more groups or variables, contrasted with the null hypothesis.

Two-sided Test

A statistical test designed to determine if there is a significant difference between a parameter and a specific value, in either direction.