Final answer:
Materials management is a balancing act involving trade-offs between customer service and costs (I), as well as balancing priorities and capacity (II), making the correct answer C. Both I and II.
Step-by-step explanation:
Materials management can be considered a balancing act because both I. There are trade-offs between customer service and the cost of providing the service, and II. Priority and capacity must be balanced. Therefore, the correct answer is C. Both I and II.
When considering materials management, an organization must carefully balance the level of customer service it wants to provide against the costs associated with providing that service. This involves strategic decisions about inventory levels, shipping methods, and handling costs. Similarly, the organization must also balance priorities, such as whether to focus on speed or quality, and manage capacity to ensure that production facilities and resources are not underutilized or overwhelmed. Compromises and trade-offs are often necessary to achieve an optimal balance between these various factors.
The economic principle at play here involves the understanding that resources are scarce and that producing one good or service often means foregoing others. Additionally, the manner in which goods and services are produced also affects the balance, as it prompts decisions regarding labor and production methods. The overall organization of economic institutions thus reflects a blend of market freedom and government regulations to strike a proper balance.