A Supplier to a Company Using JIT II

question 33

Multiple Choice

A supplier to a company using JIT II

• A) will incur increased invoicing and payment costs but will get higher prices.
• B) enjoys a savings in personnel costs because the in- plant representative is employed by the customer.
• C) will be able to sell directly to the engineering department of the customer.
• D) must be very flexible to incur the dramatic swings in requirements from the customer.

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Definitions:

Pro Forma Financial Statements

Financial statements projecting future years' earnings, usually to assess the impact of new projects or acquisitions.

Capital Intensity Ratio

A financial metric that measures the amount of assets needed per dollar of sales; higher ratios indicate a greater investment in assets to generate sales.

Capital Intensity Ratio

A measure of a company's investment in physical assets relative to its labor force, indicating the extent to which a firm's operations are automated or labor-intensive.

Operating Capacity

The maximum output that a business can produce in a given period under normal conditions, influenced by its resources and operational constraints.