If Demand Is Not Uniform and Constant, Then Stockout Risks

question 161

Multiple Choice

If demand is not uniform and constant, then stockout risks can be controlled by:

• A) increasing the EOQ.
• B) spreading annual demand over more frequent, but smaller, orders.
• C) raising the selling price to reduce demand.
• D) adding safety stock.
• E) reducing the reorder point.

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Definitions:

Experimental Method

A research methodology that involves the manipulation of one variable to determine its effect on another variable, often with the use of control and experimental groups.

Precise Control

The ability to manage or direct with great accuracy and exactness.

Real Life

Refers to actual events, situations, or experiences as opposed to those that are fictional or hypothetical.

Confounded

A situation in research where the effect of two variables cannot be separated, making the determination of causality difficult.