The Simplest Measure of Efficiency Is

question 4

Multiple Choice

The simplest measure of efficiency is:

• A) the amount of money the company has to work with in the short term.
• B) the ratio of revenues divided by invested capital.
• C) the net profit expressed as a percentage of sales.
• D) the total costs of producing products.
• E) the quantity of inputs that it takes to produce a given output.

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Definitions:

EOQ

Economic Order Quantity; the ideal order quantity a company should purchase to minimize its inventory costs, including holding, shortage, and order costs.

Just-In-Time

An inventory management strategy that aims to increase efficiency and reduce waste by receiving goods only as they are needed in the production process.

Manufacturing Firms

Companies engaged in the production of goods in large quantities, often utilizing complex machinery and human labor in factories.