Snyder Industries uses 100,000 widgets each year. If Snyder decides to place more orders each year, ordering fewer widgets each time, Snyder will be carrying ______ inventory on average and the risk of running out of inventory will ______.
A) more; fall
B) more; rise
C) less; fall
D) less; rise

Question

Quizplus · Accepted Answer

If Snyder places more orders each year with fewer widgets, they will be carrying less inventory on average. This is because they will only be ordering what they need in the short term. However, the risk of running out of inventory will rise as they will have less inventory on hand to meet unexpected demand. Therefore, the best choice is D.

Snyder Industries Uses 100,000 Widgets Each Year