Question

When there is unexpected rise in the sales ___________ .

• A. Aggregate demand would decline
• B. There will be unplanned accumulation of inventories
• C. There will be unplanned decumulation of inventories
• D. Normal profit would be lower

Answer 1

The Correct Option is C

An unexpected rise in sales leads to unplanned decumulation of inventories as stock depletes faster than expected.

Answer 2

An unexpected rise in sales can lead to an unplanned decumulation of inventories, as the rate at which stock is sold exceeds expectations. When sales increase unexpectedly, businesses often find that their inventory levels deplete faster than anticipated, leading to a shortage of goods in stock.

This situation can be problematic, especially if the business is unable to restock its inventory quickly enough to meet continued demand. It can result in missed sales opportunities, customer dissatisfaction, and potential damage to the company’s reputation.

In response to this, businesses may need to adjust their inventory management practices, increase production, or source additional products from suppliers to restore stock levels. Unplanned decumulation of inventories highlights the importance of having flexible supply chains and inventory systems that can adapt to changing market conditions.