Question

Suppose that annual demand for a certain item has decreased dramatically this year, although the store that stocks this item has not updated its inventory policy, so the store is still using the same order size and reorder point established for that item when it was selling better in previous years. Which of the following could be expected to result from this situation?

1.     The store will order the item less frequently this year.

2.     There will probably be unsold stock of that item on the store’s shelves when each new order of that item arrives.

3.     The store will pay lower ordering costs this year.

Select one:

a. 1 only

b. 2 only

c. 3 only

d. 1 and 3 only

e. 1, 2 and 3

Answer 1

The correct option is b. 2 only

Leave a positive rating if you think this answer helped