A Reduction of Inventories Will Save Money but May Increase

question 117

Multiple Choice

A reduction of inventories will save money but may increase the need for costly emergency shipments.This is an example of the ________.

• A)trade-off concept
• B)total cost concept
• C)liner service
• D)tramp service
• E)ex-works

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Definitions:

Coordinating Mechanism

Systems and processes that facilitate the efficient allocation and use of resources within an economy or organization.

Command Economy

An economic system in which the government or a central authority controls all major aspects of production and distribution.

Manufacturers Decide

The process by which companies determine what products to produce, how much to produce, and at what price to sell based on market demand and other factors.

Market Economy

An economic system where supply and demand from consumers and businesses drive economic decision-making and the allocation of resources.