All of the Following Are Reasons Why a Company Might

question 149

Multiple Choice

All of the following are reasons why a company might carry a safety stock except:

• A) a buffer against unexpected increases in demand
• B) a contingency against the uncertainty about lead time
• C) a strategy to lower the carrying cost of inventory
• D) a way of softening the impact of sudden unavailability of stock from suppliers

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Definitions:

Capital Quality

The degree of excellence of physical and intellectual assets used in the production of goods or services, affecting overall productivity and efficiency.

Simon Kuznets

An economist known for his work on economic growth and for formulating the concept of Gross Domestic Product (GDP) as a measure of national income.

Economic Growth

An increase in the production of goods and services in an economy, typically measured by GDP.

Quality of Resources

The effectiveness, efficiency, and skills of economic resources, including labor, capital, and natural resources.