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.