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Chapter 10

Q. 10.CR.2

What alternatives are available to discourage overproduction?


Verified Solution

To discourage overproduction, a number of options exist. These alternatives include charging the cost of extra inventory to the person responsible for the inventory decision, imposing a strict policy against adding or building inventories, choosing long-term performance measures to reduce the advantage of boosts to short-term profit, and implementing JIT to reduce inventory levels.