The Supplier for Omega Corporation Has Offered the Company a 5

question 66

Multiple Choice

The supplier for Omega Corporation has offered the company a 5 percent discount if it will order more units less frequently.If Omega accepts the supplier's offer,the cost of carrying inventory will _____ and the cost of running out of inventory will _____.

• A)rise,stay the same
• B)fall,decrease
• C)rise,decrease
• D)fall,stay the same

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Definitions:

Numerical Terms

Mathematical expressions or figures used to describe quantity, order, or relationships between amounts in data or calculations.

Sensitive

Quick to detect or respond to slight changes, signals, or influences.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Differential Cost

The difference in cost between two alternative decisions or scenarios, important in the process of making financial decisions.