Which of the Following Is NOT a Benefit of Holding

question 54

Multiple Choice

Which of the following is NOT a benefit of holding inventory?

• A) minimizes the risk that the firm will not be able to obtain an input it needs for production
• B) seasonality of demand, meaning that customer purchases often do not match the most efficient production cycle, leading to a buildup of inventory in off-peak periods
• C) minimizes order cost from placing multiple orders throughout the year
• D) minimizes risks involved in spoilage and obsolescence

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Definitions:

Interval Data

A type of quantitative data that involves measurements where the difference between two values is meaningful, but there is no true zero point.

Bimodal Data

Data that has two different modes, or peaks, in its frequency distribution.

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all of the data will fall within three standard deviations of the mean.

Measure Variability

The degree to which data points in a dataset differ from each other and from their average value.