Which Statement Is Most Accurate When Deciding How Much and When

question 22

Multiple Choice

Which statement is most accurate when deciding how much and when to buy?

• A)Balance price,volume,carrying cost,and the cost of stock-outs.
• B)Use the forecast future demand,lead times,and prices to determine optimal order volume.
• C)Determine the price premium to attain the desired order quantity.
• D)Managers seldom make purchase decisions until they are absolutely sure of the volume required.
• E)The costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy.

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Definitions:

Supply And Demand

The fundamental economic model that determines the price of goods and services in a market, based on the quantity available (supply) and the desire for them (demand).

MRP

Material Requirements Planning is a system for calculating the materials and components needed to manufacture a product.

Productivity

The measure of how efficiently inputs are converted into outputs in a production process.

Residential Use

Pertains to property or resources utilized for dwelling purposes, including houses and apartments designed for people to live in.