In Service Operations,what Must Managers Do to Meet Fluctuations in Demand

question 37

Multiple Choice

In service operations,what must managers do to meet fluctuations in demand?

• A)Build inventory
• B)Make product before realization of demand
• C)Rely on extra capacity
• D)Have 100% resource utilization

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Definitions:

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to products or job orders, based on a projected level of activity.

Direct Labor-Hours

The total number of labor hours worked by employees who are directly involved in the manufacturing process.

Job-Order Costing System

An accounting system that accumulates costs per job rather than per time period, used in industries where goods are custom-made.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a certain activity.