Which Statement Is Not Correct About the Perpetual Inventory System

question 110

Multiple Choice

Which statement is not correct about the perpetual inventory system for inventory management?

• A)This system keeps track of additions to and withdrawals from inventory.
• B)It is not necessary to conduct an inventory count if the perpetual system is used.
• C)This method produces timely information for management.
• D)With this method, the company knows the inventory on hand and the related cost of goods sold at any point in time.

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Definitions:

Stackelberg Model

A strategic game theory model that describes a market structure in which one firm (the leader) sets its output or price first, and then other firms (followers) make their decisions sequentially.

Reaction Curve

A graphical representation in economics that shows how one player’s optimal strategy choice depends on the strategy choice of another player.

Cournot Model

An economic model used to describe an industry structure in which companies compete on the quantity of output they will produce, assuming that their competitor's decisions are fixed.

Stackelberg Model

An economic model of strategic interaction in oligopolistic markets where one firm (the leader) sets its output first and then other firms (followers) set their outputs sequentially.