Question

The cost of overestimating demand is usually harder to determine than the cost of underestimating demand. Group of answer choices False True

Answer 1

Answer:

The statement is: False.

Explanation:

In supply chain management, incremental analysis is in charge of determining the cost of ordering one more additional unit of a product over the cost of no requesting that additional unit. The cost of overstimulating demand is the loss of ordering one additional unit and discovering that it cannot be sold. The cost of underestimating demand is the opportunity loss for nor requesting one additional and discovering it could have been sold.

The cost of underestimating demand is more difficult to determine than the cost of overestimating demand because underestimating demand because it involves customer's desires on purchasing a product when not having the resources to do so.