One of the Traditional Reasons for Holding Inventory Is to Take

question 31

Multiple Choice

One of the traditional reasons for holding inventory is to take advantage of quantity discounts and hedge against future price increases.What is the JIT solution meant to do?

• A)reduce setup costs
• B)reduce lead time
• C)use long-term contracts with suppliers
• D)use total quality control

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Definitions:

Voluntarily Pay

Refers to making a payment or contribution freely without coercion, typically in contexts where payments are not legally mandated.

Marginal Cost

The incremental cost of producing an extra unit of a good or service.

Rivalry

(1) The characteristic of a private good, the consumption of which by one party excludes other parties from obtaining the benefit; (2) the attempt by one firm to gain strategic advantage over another firm to enhance market share or profit.

Excludability

The characteristic of a private good, for which the seller can keep nonbuyers from obtaining the good.