When Different Investment Rules Give Conflicting Answers, Then Decisions Should

question 60

True/False

When different investment rules give conflicting answers, then decisions should be based on the Net Present Value rule, as it is the most reliable and accurate decision rule.

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Definitions:

Product Fill Rate

The percentage of customer or sales orders fulfilled from stock at hand.

Order Fill Rate

A measure of supply chain efficiency that indicates the percentage of customer orders that are fulfilled without backorders or stockouts.

Safety Inventory

Extra inventory held to guard against uncertainty in demand or supply.

Product Availability

The extent to which goods are in stock and ready for sale or delivery at any given time.