A Decrease in the Lead Time Would Reduce the

question 59

Multiple Choice

A decrease in the lead time would reduce the

• A)order point.
• B)safety stock.
• C)economic order quantity.
• D)ordering costs.

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or other activity of a business, such as materials and labor costs.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including rent, salaries, and insurance costs.

Total Revenue

The overall amount of money generated by a business from its sales of goods or services, calculated by multiplying the price per unit by the number of units sold.

Variable Costs

Costs that change in proportion to the level of output or activity.