Which of the Following Is Correct

question 20

Multiple Choice

Which of the following is correct?

• A) order quantities are fixed in the periodic review system
• B) the two-bin system is an example of the order point system
• C) the safety stock does not depend upon the frequency of reorder
• D) all of the above are true
• E) none of the above is true

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Definitions:

Fixed Costs

Costs that tend to remain the same in amount, regardless of variations in the level of activity.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in a decision-making situation.

Differential Cost

The difference in total cost that will result from selecting one choice over another.

Additional Cost

Expenses incurred that are above and beyond the initial forecast or budget for a project or product.