Which of the Following Does Not Minimize Ordering Costs When

question 20

Multiple Choice

Which of the following does not minimize ordering costs when using JIT purchasing?

• A) Reducing the number of vendors.
• B) Negotiating long-term supply agreements.
• C) Making less frequent payments.
• D) Maintaining a safety stock.
• E) Eliminating inspections.

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Definitions:

Beta Coefficient

A framework for quantifying the variability, or orderly risk, of a security or investment compilation when juxtaposed with the general market.

Risk Premium

The additional return an investor demands for choosing a risky investment over a risk-free option, serving as compensation for the additional risk.

Capital Asset Pricing Model

A framework that explains the link between the inherent risk and anticipated return on assets, especially equities.

Efficient Frontier

A portfolio optimization concept that outlines the set of optimal portfolios offering the highest expected return for a defined level of risk or the lowest risk for a given level of expected return.