When the Cost of Lost Sales Due to Stock-Outs Is

question 7

Multiple Choice

When the cost of lost sales due to stock-outs is greater than the sum of ordering, buying, and maintaining the inventory, the company needs to :

• A) Stock up more
• B) Reduce inventory
• C) Increase inventory carrying cost
• D) Decrease the quality of inventory

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Definitions:

Parasympathetic

Part of the autonomic nervous system that conserves energy and resources during rest and digest states, controlling functions such as digestion and heart rate.

Autonomic Nervous System

The part of the nervous system that unconsciously controls the functions of internal organs and glands.

Rest-And-Digest

The rest-and-digest response, also known as the parasympathetic response, is a physiological reaction that decreases stress and energy expenditure by slowing the heart rate and increasing intestinal and gland activity.

Sympathetic Nervous System

Part of the autonomic nervous system that controls the body's responses to stress or emergency situations, often referred to as the "fight or flight" system.