Select Any One Of the Following Options: A car company manufactures 100 automobiles to sell in the market. However, the company is able to sell only 60 automobiles. There would be:Unplanned inventory Run down of 60Unplanned inventory Run Down of 40Unplanned inventory accumulation of 40Unplanned inventory Accumulation of 60
Question
Select Any One Of the Following Options: A car company manufactures 100 automobiles to sell in the market. However, the company is able to sell only 60 automobiles. There would be:Unplanned inventory Run down of 60Unplanned inventory Run Down of 40Unplanned inventory accumulation of 40Unplanned inventory Accumulation of 60
Solution 1
The correct answer is: Unplanned inventory accumulation of 40.
Here's why:
The car company manufactured 100 automobiles intending to sell all of them. However, they were only able to sell 60 automobiles. This means that there are 40 automobiles that were produced but not sold.
In inventory management terms, this is referred to as 'unplanned inventory accumulation'. 'Unplanned' because the company did not plan to have these extra automobiles, 'inventory' referring to the automobiles themselves, and 'accumulation' because these automobiles are now accumulating, or building up, in the company's inventory.
So, the company has an unplanned inventory accumulation of 40 automobiles.
Solution 2
The correct answer is: Unplanned inventory accumulation of 40.
Here's why:
The car company manufactured 100 automobiles intending to sell all of them. However, they were only able to sell 60 automobiles. This means that there are 40 automobiles that were produced but not sold.
In inventory management terms, this is referred to as 'unplanned inventory accumulation'. 'Accumulation' because the inventory has increased beyond what was planned, and 'unplanned' because this was not the company's intention.
So, the company has an unplanned inventory accumulation of 40 automobiles.
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