The Minimum Level of Inventory That a Firm Wants to Keep

question 56

Multiple Choice

The minimum level of inventory that a firm wants to keep on hand at all times is referred to as:

• A)the base level.
• B)safety stock.
• C)the opportunity cost.
• D)the reorder point.
• E)keiretsu.

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Definitions:

Single Population

Refers to a group or set of similar items or individuals from which statistical data are gathered for analysis.

Chi-square Distribution

A probability distribution used in statistical significance tests, which is built on the sum of squared standard normal deviates.

Confidence Interval

A variety of numerical values, obtained from statistical analysis of a sample, which probably includes the value of an unseen population characteristic.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, calculated as the square root of the variance.