Question

According to the square root law of cycle stocks, if the throughput volume in a warehouse quadruples (all else equal), its average inventory levels will double.

a) true
b) false

Answer 1

True, the square root law indicates that if warehouse throughput volume quadruples, average inventory levels will indeed double.

Step-by-step explanation:

True or false: According to the square root law of cycle stocks, if the throughput volume in a warehouse quadruples (all else equal), its average inventory levels will double. The answer to this question is true. The square root law of inventory management states that the average inventory level changes with the square root of the change in throughput. Therefore, if the throughput volume quadruples, the square root of four is two, which indicates that inventory levels will double, all other factors being equal.