Distortion in MRP Systems Can Be Minimized When Safety Stock

question 100

Multiple Choice

Distortion in MRP systems can be minimized when safety stock is held at the:

• A) purchased component or raw material level.
• B) work-in-process level.
• C) finished goods level.
• D) A and B
• E) A and C

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Definitions:

Outputs

Outputs are the goods or services produced by a company or an economic system as a result of its inputs and processes.

Controllable Variance

The portion of variance that can be directly managed or influenced by a manager, often related to costs within a specific period.

Variable Overhead

Costs that fluctuate with the level of output or production activity, such as utilities for a manufacturing line.

Budgeted Variable Overhead

Estimated costs related to variable overhead that are planned or expected for a specific period in the budgeting process.