Practice Quiz

Supply Chain Management

Category - Inventory

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Substitution in inventories only occurs when __________.
  1. Suppliers make the decision to substitute
  2. Customers make the decision to substitute
  3. Manufacturers make the decisions to substitute
  4. All of the above.
Explanation
Answer: D - Substitution in inventories occurs when suppliers, manufacturers, or customers make the decision to substitute. For example, the manufacturer will typically substitute a higher value product for a lower value product, or the customer will perform substitution if he finds Product A unavailable by replacing it with Product B.
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