Which of the Following Statements Is True of Inventory

question 36

Multiple Choice

Which of the following statements is true of inventory?

• A)Managing an inventory requires balancing between availability and cost.
• B)Inventory size increases as consumers purchase items.
• C)Inventory management decisions are limited to the size of the inventory.
• D)Increasing the inventory size always increases a company's profitability.

Comprehend the objective of trade promotions in supply chains.

Analyze variable pricing strategies, including quantity discounts and their impact on supply chain functionality.

Understand the rationale and impact of forward buying in supply chains.

Identify the benefits of supply chain coordination for maximizing total supply chain profits.

---

Definitions:

Allocation of Budgeted Costs

This refers to the process of distributing the total budgeted costs across different departments, projects, or activities based on predetermined criteria.

User Department

A department within an organization that directly uses or benefits from a product or service, as opposed to departments involved in production or administration.

Standard Budgeted Rates

Predetermined costs used in budgeting and costing processes to standardize the allocation of expenses for labor, materials, and overhead.

Predetermined Overhead Rates

Rates established in advance to allocate overhead costs to products or job orders, based on estimated costs and activity levels.