The Average Lead Time of a Unit of Product Through

question 20

Multiple Choice

The average lead time of a unit of product through a manufacturing station is 10 minutes. The production rate has been steady at five units per hour. The average work-in-process inventory at this station is:

• A) 50 units.
• B) 10 units.
• C) 5 units.
• D) 0.83 units.

---

Definitions:

Growth Rate

The rate at which a company's earnings or capital is expected to grow, usually annually, influencing investment decisions.

Dividends

Monies disbursed by a business to its owners, often coming from the profit the company makes.

Costs

The monetary valuation of effort, material, resources, time, and opportunity foregone in production and delivery of a good or service.

Retention Ratio

The proportion of a company's net income that is retained rather than paid out as dividends, indicating reinvestment back into the company.