The Desired Level of Inventories Is the Level at Which

question 312

Multiple Choice

The desired level of inventories is the level at which the extra cost (in lost sales) from lowering inventories by a small amount is

• A) greater than the extra gain (in interest revenue and decreased storage costs).
• B) zero.
• C) less than the extra gain in (in interest revenue and decreased storage costs).
• D) just equal to the extra gain (in interest revenue and decreased storage costs).

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Definitions:

Brown-black Pigment

Melanin, the natural substance in the body that gives color to the skin, hair, and eyes, and offers protection against UV radiation.

Subcutaneous

Concerning anything that is situated below the skin layer.

Dermis

The thick layer of tissue below the epidermis in mammalian skin, containing blood capillaries, nerve endings, sweat glands, and hair follicles.

Dilate

To enlarge, expand in size; to increase the size of an opening.