A Toy Manufacturer Accumulates Inventories Because of the Uncertainty of the Demand

question 12

Multiple Choice

A toy manufacturer accumulates inventories because of the uncertainty of the demand for their product at Christmas and the desire not to lose any potential sales. This is an example of the ______ motive for holding inventories.

• A) production smoothing
• B) inventories as a factor of production
• C) stock-out avoidance
• D) work in process

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Definitions:

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