Which of the Following Statements Is FALSE

question 2

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:

Behaviour

The actions or reactions of a person or object in response to external or internal stimuli.

Positive Reinforcement

A technique used to encourage desired behavior by offering rewards or incentives when the behavior is demonstrated.

Approval

The act of accepting or endorsing something as meeting a required standard or condition.

Useful Comment

A constructive and beneficial observation or feedback that contributes to improvement or understanding.