The Lot- Sizing Rule That Generates the Highest Level of Average

question 94

Multiple Choice

The lot- sizing rule that generates the highest level of average inventory because it creates inventory remnants is

• A) periodic order quantity (POQ).
• B) lot- for- lot (L4L).
• C) fixed order quantity (FOQ).
• D) usage quantity.

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Definitions:

Capital Intensity Ratio

A firm’s total assets divided by its sales, or the amount of assets needed to generate $1 in sales.

Retention Ratio

The retention ratio, in financial terms, refers to the percentage of a company's net income that is retained and not distributed as dividends to shareholders, indicating how much of its profit a company reinvests.

Dividend Payout Ratio

A financial ratio that measures the percentage of a company's net income that is distributed to shareholders in the form of dividends.

Capital Intensity Ratio

A measure of how much capital is required to produce one unit of output, often used to evaluate the business's capital efficiency.