When demand is stable, increasing the lot size ordered will increase the amount of cycle inventory.

Question

BlackTom AI · Accepted Answer

To analyze the statement, we start from the concept of cycle inventory in inventory management under constant demand.
When demand is stable and in a steady-state system, cycle inventory is the portion of inventory that is built up during the production or ordering cycle and consumed as demand occurs. In practical terms, cycle inventory is typically proportional to the order quantity (lot size).
If you increase the lot size ordered while demand remains unchanged, you are increasing the amount of stock that must be held to cover the continuous consumption over the cycle. This directly raises the average level of cycle inventory in the system.
Put another way, larger orders create more stock that sits on the shelf while waiting to be sold, which translates to higher cycle stock. The relationship is linear under a constant demand rate: bigger Q means bigger cycle inventory, all else equal.
There are no hidden caveats in the statement about stability of demand that would negate this; stability simply ensures the proportional relationship holds over time, without surprises from fluctuating demand.
Therefore, the assertion that increasing the lot size ordered increases the amount of cycle inventory is true. It aligns with the standard decomposition of total inventory into cycle stock and safety stock (when present), with cycle stock rising in step with order quantity.

SP25-BL-BUS-P481-5624 11. Economies of Scale

When demand is stable, increasing the lot size ordered will increase the amount of cycle inventory.

查看解析

登录即可查看完整答案

类似问题

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单