Asked by Steven Walsh on Jun 17, 2024

verifed

Verified

Whether the optimal level of product availability is high or low depends on where a particular company believes they can

A) minimize cost.
B) maximize revenue.
C) maximize profits.
D) maximize product availability.

Optimal Level

The most favorable point or condition that yields the best outcome for a specific objective, such as profit maximization or cost minimization.

Maximize Profits

The process of increasing the financial gain from business activities to the highest possible level.

Product Availability

The extent to which goods are in stock and accessible for purchase by consumers.

  • Acknowledge the critical significance of ensuring optimal product availability for the maximization of profits.
verifed

Verified Answer

RC
Rebekah CarverJun 24, 2024
Final Answer :
C
Explanation :
The optimal level of product availability should be set to maximize profits, which is the difference between revenue and cost. This means that a company should balance the cost of maintaining inventory levels and the potential lost revenue from stockouts to achieve the highest profitability. Setting product availability too high could result in excess inventory costs, while setting it too low could result in lost sales and reduced revenue. Therefore, maximizing profits is the best choice.