A Company Keeps 20 Days of Materials Inventory on Hand

question 110

Multiple Choice

A company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average £4,000 per day. A competitor keeps 10 days of inventory on hand, and the competitor's carrying costs average £2,000 per day. The nonvalue-added costs for the company are

• A) £80,000.
• B) £40,000.
• C) £20,000.
• D) £-0-.

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Definitions:

Expert Power

The influence one possesses as a result of expertise, skill, or knowledge, which others depend upon.

Transformational Leader

A leadership style characterized by the ability to inspire and motivate followers to exceed their own interests for the sake of the organization or a larger purpose.

Influence Tactics

Strategies or actions used by individuals or groups to persuade or motivate other people to follow their lead or agree with their ideas.

Logic and Reasoning

The process of forming conclusions, judgments, or inferences from facts or premises, providing a basis for rational decision-making and problem-solving.