Unnecessary Inventory Usually Results from One Thing: Uncertainty

question 59

True/False

Unnecessary inventory usually results from one thing: uncertainty.

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Definitions:

Marginal Output

The additional output that can be produced by adding one more unit of a particular input, while holding all other inputs constant.

Variable Inputs

Variable inputs in production are those inputs that change in quantity with the level of output, such as raw materials and labor.

Inputs

The resources such as labor, materials, and capital that are used in the production process to create goods and services.

AFC

Acronym that stands for Average Fixed Cost, the fixed costs of production divided by the quantity of output produced.