Asked by Jasmine Simpson on May 04, 2024
Verified
A(n) _____ relationship exists between the cost of lost sales and inventory cost.
A) reverse
B) proportional
C) inverse
D) nonlinear
Inverse Relationship
A correlation between two variables in which they move in opposite directions; as one increases, the other decreases.
Lost Sales
The potential revenue that a company misses out on due to stockouts, inability to meet demand, or customer decisions to buy elsewhere.
Inventory Cost
Refers to the total cost associated with holding and managing inventory, including storage, insurance, taxes, spoilage, and obsolescence costs.
- Understand the principles of inventory management and their economic consequences.
Verified Answer
Learning Objectives
- Understand the principles of inventory management and their economic consequences.
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