If Inventories Decline by More Than Analysts Predict They Will

question 287

Multiple Choice

If inventories decline by more than analysts predict they will decline,this implies that

• A)actual investment spending was greater than planned investment spending.
• B)actual investment spending was less than planned investment spending.
• C)actual investment spending was equal to than planned investment spending.
• D)there is no relationship between actual investment spending and planned investment spending.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variation in a set of values, indicating how much the values diverge from the average of the set.

Safety Stock

Inventory kept on hand to protect against fluctuations in demand or supply, ensuring that there are no stockouts.

Reorder Point

The inventory level at which a new order should be placed to replenish stock before it runs out, taking into account lead times.

Lead Time

The total time taken from the initiation of a process or order until its completion or delivery.