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Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:
- a)Planned accumulation of inventories
- b)Unplanned accumulation of inventories
- c)Planned decumulation of inventories
- d)Unplanned decumulation of inventories
Correct answer is option 'A'. Can you explain this answer?
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Suppose a TV manufacturing unit wants to raise its inventories from 10...
Planned accumulation of inventories
When a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year, it means that the company plans to increase its stock of TVs. In this case, the company expects to sell 5000 units during the year, which is the planned sales target.
Based on the expected sales of 5000 units, the manufacturing unit decides to produce 6000 TV sets. This decision is made with the intention of building up their inventory to meet the expected demand.
However, the actual sales for the year turn out to be 5000 TV sets, which means that the company did not achieve its planned sales target. Despite this, the company was still able to sell all the units it produced.
Since the actual sales were lower than the planned sales, the company ends up with an accumulation of inventories. The company produced 6000 TV sets but only sold 5000, resulting in an additional 1000 units being added to their inventory.
In this scenario, the planned accumulation of inventories occurred because the company produced more units than it was able to sell. This indicates that the company's production decision did not align with the actual market demand. As a result, the company now has excess inventory that it needs to manage and may need to adjust its production strategy in the future to meet the actual sales demand more accurately.
Explanation:
When a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year, it means that the company plans to increase its stock of TVs. In this case, the company expects to sell 5000 units during the year, which is the planned sales target.
Production Decision:
Based on the expected sales of 5000 units, the manufacturing unit decides to produce 6000 TV sets. This decision is made with the intention of building up their inventory to meet the expected demand.
Actual Sales:
However, the actual sales for the year turn out to be 5000 TV sets, which means that the company did not achieve its planned sales target. Despite this, the company was still able to sell all the units it produced.
Accumulation of Inventories:
Since the actual sales were lower than the planned sales, the company ends up with an accumulation of inventories. The company produced 6000 TV sets but only sold 5000, resulting in an additional 1000 units being added to their inventory.
Conclusion:
In this scenario, the planned accumulation of inventories occurred because the company produced more units than it was able to sell. This indicates that the company's production decision did not align with the actual market demand. As a result, the company now has excess inventory that it needs to manage and may need to adjust its production strategy in the future to meet the actual sales demand more accurately.
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Community Answer
Suppose a TV manufacturing unit wants to raise its inventories from 10...
Planned Inventory: In case of an expected fall in sales, the firm will have unsold stock of goods which had not been anticipated.
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Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:a)Planned accumulation of inventoriesb)Unplanned accumulation of inventoriesc)Planned decumulation of inventoriesd)Unplanned decumulation of inventoriesCorrect answer is option 'A'. Can you explain this answer?
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Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:a)Planned accumulation of inventoriesb)Unplanned accumulation of inventoriesc)Planned decumulation of inventoriesd)Unplanned decumulation of inventoriesCorrect answer is option 'A'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:a)Planned accumulation of inventoriesb)Unplanned accumulation of inventoriesc)Planned decumulation of inventoriesd)Unplanned decumulation of inventoriesCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:a)Planned accumulation of inventoriesb)Unplanned accumulation of inventoriesc)Planned decumulation of inventoriesd)Unplanned decumulation of inventoriesCorrect answer is option 'A'. Can you explain this answer?.
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ample number of questions to practice Suppose a TV manufacturing unit wants to raise its inventories from 1000 units to 2000 units during the year. Expecting sale of 5000 units during the year, the firm produces 5000 + 1000 = 6000 TV sets. Actual sale for the firm are 5000 TV sets during the year. This is an example of:a)Planned accumulation of inventoriesb)Unplanned accumulation of inventoriesc)Planned decumulation of inventoriesd)Unplanned decumulation of inventoriesCorrect answer is option 'A'. Can you explain this answer? tests, examples and also practice Humanities/Arts tests.
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