Every Time an Order Is Placed at a Work Center

question 25

Multiple Choice

Every time an order is placed at a work center, the time taken to set up is lost as a productive output time. This is ____________ cost.

• A) purchase order
• B) setup and teardown
• C) production control
• D) lost capacity

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Definitions:

Supply Equation

A mathematical expression that shows the relationship between the quantity of a good that producers are willing to sell and factors that influence this quantity, such as price.

Price Floor

A government or group-imposed price control that sets the lowest legal price a commodity can be sold at. It is used to ensure producers receive a minimum price often in agriculture.

Shortage/Surplus

Shortage occurs when demand exceeds supply, while surplus occurs when supply exceeds demand.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a market.