Which of the Following Statements Is False

question 1

Multiple Choice

Which of the following statements is false?

• A) Firms may hold inventory because factors such as seasonality in demand mean that customer purchases do not perfectly match the most efficient production cycle.
• B) Inventory helps minimize the risk that the firm will not be able to obtain an input it needs for production.
• C) If a firm holds too much inventory, stock-outs, the situation when a firm runs out of product, may occur, leading to lost sales.
• D) Because excessive inventory uses cash, efficient management of inventory increases firm value.

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Definitions:

Government Market

A market segment where the main customer is any government entity, purchasing products or services for public service.

Organizational Buyer

An organization that purchases goods or services for its own use or for further production, including companies, governments, and institutions, not individual consumers.

Janitorial Services

Services provided to maintain cleanliness and upkeep of buildings and facilities.

Business-to-Business Marketing

Marketing efforts directed from one company to another, rather than to individual consumers.