Which of the Following Statements Is Not True

question 32

Multiple Choice

Which of the following statements is not true?

• A) Optimal inventory levels involve a trade-off between carrying costs and order costs.
• B) Carrying costs include the cost of storing goods as well as the cost of capital tied up in inventory.
• C) Inventory levels will be lower when storage or interest costs are high and will be higher when restocking costs are high.
• D) Inventory level does not rise in direct proportion to sales. As sales increase, the optimal inventory level rises, but more than proportionately.

---

Definitions:

Contradictory Goals

Objectives within an organization or project that are at odds with each other, making it difficult or impossible to achieve them simultaneously.

Holding Period

The duration of time an investment is held by an investor, impacting tax treatment and investment strategy.

Second Stage

The second stage usually refers to an intermediate or development phase in a process, project, or lifecycle, where initial foundations have been built upon but final objectives are not yet reached.

Management

The process of dealing with or controlling things or people, including planning, organizing, leading, and controlling resources to achieve organizational goals.