Consider a Three Sequentially Stepped Process Named as Process A

question 7

Multiple Choice

Consider a three sequentially stepped process named as Process A, Process B, and Process C. Input comes into Process A. Output from A goes into Process B. Output from B goes into Process C. Output of C is the final output. Suppose that it takes 2 minutes per unit in Process A, 3 minutes per unit in Process B and 1 minute per unit in Process C. Suppose further that Process A receives input at the rate of 30 per hour. Where would you place a buffer?

• A) in front of Process A
• B) in front of Process B
• C) in front of Process C
• D) in front of both Process B and Process C
• E) None of these choices are correct.

---

Definitions:

Contingent Liability

A potential obligation that may arise depending on the outcome of a future event or set of circumstances.

Deferred Tax Liability

This is a tax obligation due in the future for income already recorded in the financial statements, resulting from temporary differences between accounting and tax treatments.

Goodwill

The excess amount paid over the fair value of net assets acquired in a business combination, representing intangible assets such as brand reputation or customer relationships.

Future Costs

Expenses that are expected to be incurred in the future, which can include operational expenses, capital expenditure, or other financial liabilities.