Question

The inventory pattern shown in the figure does not represent the following:

• A. Inventory is replenished instantaneously
• B. Demand decreases with time
• C. Shortage is not permitted
• D. Demand is uniform

Hint:

A straight, downward-sloping inventory curve with instant restocking represents uniform demand, not decreasing demand.

Answer 1

The Correct Option is B

The inventory pattern shown is a classic saw-tooth diagram, which represents a system where inventory is replenished instantly at a fixed point, and then steadily consumed over time due to constant demand. The slope of the decreasing inventory lines is linear, indicating uniform demand. Since inventory is replenished before reaching zero, no shortages occur. Also, the inventory jumps vertically, showing instantaneous replenishment. However, the graph does not indicate that demand decreases with time; instead, it remains constant throughout.