Which of the Following Is a Disadvantage of Excessive Inventory

question 23

Multiple Choice

Which of the following is a disadvantage of excessive inventory?

• A)it creates an unnecessary waste of scarce resources.
• B)It leads to higher inventory ordering cost.
• C)It leads to lower average inventory.
• D)It eliminates cycle stock.
• E)It reduces the need to conduct cycle count.

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Definitions:

Full Employment

A situation in an economy in which all who are willing and able to work at prevailing wage rates are employed.

Production Possibility Frontier

A graphical representation showing the maximum combination of goods and services that can be produced with available resources and technology.

Resources Scarcity

The economic condition of limited natural resources available to meet the unlimited wants and needs of people.

Downward Slope

A graphical representation indicating a decrease or decline in a variable as another variable increases, often seen in demand curves.