What Is the Order in Which an Economy Tries to Solve

question 35

Multiple Choice

What is the order in which an economy tries to solve the issue of resource allocation?

• A)Production planning, distribution, and output selection
• B)Output selection, production planning, and distribution
• C)Production planning, output selection, and distribution
• D)Distribution, production planning, and output selection

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Definitions:

EOQ

Economic Order Quantity, a formula used to determine the optimal quantity of inventory to order that minimizes total inventory costs.

Fixed Ordering Costs

Fixed ordering costs are consistent expenses incurred in the process of ordering inventory or supplies, regardless of the order size.

Material Cost

The expense incurred to purchase or produce the raw materials used in manufacturing a product.

Cash Management

The strategy of collecting, managing, and investing cash in a way that maximizes the availability of cash and minimizes the cost of using external funds.