In Reviewing the Appropriateness of the Minimum Quantity Level of Inventory

question 462

Multiple Choice

In reviewing the appropriateness of the minimum quantity level of inventory established by a department, an auditor would be least likely to consider:

• A) Stockout costs, including lost customers.
• B) Seasonal variations in forecasting inventory demand.
• C) Optimal order sizes determined by an economic order quantity model.
• D) The potential for obsolescence of inventory items.

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Definitions:

Lubricant

A lubricant is a substance used to reduce friction between surfaces in contact, minimizing wear and facilitating smooth movement.

Joint Cavities

Structures in the human body where two bones meet, allowing for movement and providing a protective space for organs.

Proteoglycan

Large molecules found in the extracellular matrix of connective tissues, consisting of a protein core and glycosaminoglycan chains; important for tissue hydration and elasticity.

Traps Water

Refers to materials or structures that are capable of retaining water or moisture.