E&OE Is Trying to Minimize Its Inventory Costs, Which Are

question 140

Multiple Choice

E&OE is trying to minimize its inventory costs, which are extremely high. The company has realized that it can achieve this by maintaining a near-zero inventory and producing more products only once it is ordered. Which of the following will be true for E&OE?

• A) Short production runs will be more expensive than longer ones.
• B) Setup and order-processing costs will be high.
• C) The order point will be high.
• D) Order-processing costs will be lower than the inventory-carrying costs.
• E) E&OE can reduce the average cost per unit by producing a long run.

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Definitions:

Highly Automated

Referring to processes, systems, or operations that extensively utilize automation technology to minimize human intervention.

Hand Labor

Work done manually by humans without the aid of advanced machinery, often requiring skilled craftsmanship.

Process Configuration

The arrangement and organization of various elements in a manufacturing or service delivery system to optimize efficiency and output.