A Company That Forecasts Sales, Builds an Inventory Based on the Forecast

question 107

Multiple Choice

A company that forecasts sales, builds an inventory based on the forecast, holds the components in inventory until a customer order is received and then finalizes the product based on the order is using a ________ strategy.

• A)supply
• B)push-pull
• C)push
• D)pull
• E)demand

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Definitions:

Scrap Value

The estimated residual value of an asset after it has reached the end of its useful life and is no longer economically serviceable.

Units Of Production

A method of allocating the cost of a tangible asset over its useful life based on the amount of production or use of the asset.

Scrap Value

The estimated resale value of an asset after it has reached the end of its useful life.

Units-Of-Production Method

A depreciation method that allocates expenses based on the actual usage or production levels of an asset over its useful life.