-Refer to the Diagram Above

question 65

Multiple Choice

-Refer to the diagram above.The distance __________ measures the __________.

• A) 0P1;external cost
• B) 0P2;external cost
• C) P1P2;external cost
• D) P1P3;external cost
• E) P1P2;external benefit

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Definitions:

Small Lot Sizes

Production or ordering in limited quantities, which can enhance flexibility and reduce inventory costs.

Just-In-Time Production

An inventory strategy companies use to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.