A Company's Inventory Levels Are Dependent on a Number of Variables

question 85

True/False

A company's inventory levels are dependent on a number of variables including the demand for the product, supplier relationships, and supplier relationships with their manufacturers.

---

Definitions:

Supply Chain Surplus

The total value generated by the supply chain, measured as the difference between the value of the final product to the consumer and the costs of the supply chain.

Supply Chain

A network of all entities involved in producing and delivering a specific product or service, from raw materials to end customers.

Bullwhip Effect

The phenomenon in supply chains where small fluctuations in demand at the retail level cause progressively larger variations in demand at wholesale, distributor, and manufacturer levels.

Lot Sizes

The number of units of a product that are manufactured or acquired in a single production run or order, affecting both inventory levels and production cost.