If carrying costs are less than shortage costs, then the company will maximise value by adopting a more restrictive strategy.

Name: If carrying costs are less than shortage costs, then the company will maximise value by adopting a more restrictive strategy.
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Question

Quizplus · Accepted Answer

If carrying costs are less than shortage costs, then it is more beneficial for the company to adopt a less restrictive strategy to avoid incurring high shortage costs rather than carrying excess inventory and incurring carrying costs.

If Carrying Costs Are Less Than Shortage Costs, Then the Company