Significant Changes in an MPS Quantity Several Weeks into the Planning

question 19

Multiple Choice

Significant changes in an MPS quantity several weeks into the planning horizon can:

• A)Make the MRP more accurate.
• B)Cause inconsistencies in the MRP.
• C)Reduce stockouts.
• D)Increase safety stock.

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Definitions:

Cost Per Equivalent Unit

An accounting measure used in process costing that represents the cost incurred to produce an equivalent unit of production.

Step-Down Method

A cost allocation method used in costing multiple service departments where the cost of one service department is allocated to others and subsequently to production departments.

Cost Allocation

The process of identifying, aggregating, and assigning costs to cost objects, such as departments, products, or services.

Service Department

A department that does not directly engage in operating activities; rather, it provides services or assistance to the operating departments.