When stocked items are sold,the optimal inventory decision using marginal analysis is to stock that quantity where profit from the sale or use of the last unit is equal to or greater than the losses if the last unit remains unsold.

Question

Quizplus · Accepted Answer

This statement is a correct representation of the optimal inventory decision using marginal analysis. It is essential to find the level where the marginal benefit of stocking is equal to the marginal cost of stocking. This ensures that the company does not incur unnecessary losses from unsold goods and maximizes profits by stocking the optimal quantity.

When Stocked Items Are Sold,the Optimal Inventory Decision Using Marginal