The Supplier Performance Index (SPI) Equals (_____ Plus _____) Divided

question 77

Multiple Choice

The supplier performance index (SPI) equals (_____ plus _____) divided by _____.

• A)Total Purchases….Nonperformance Costs….Total Purchases
• B)Nonperformance Costs….Total Purchases….Nonperformance Costs
• C)Total Purchases….Appraisal Costs….External Failure Costs
• D)External Failure Costs….Internal Failure Costs….Total Purchases
• E)Transportation Costs….Appraisal Costs….Prevention Costs

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales.

Cost Of Capital

The rate of return that a business needs to generate from its investments in order to cover the cost of raising funds, either through debt or equity.

Capital Budgeting

The process used by companies to evaluate which major projects or investments should receive funding.

Incremental Cash Flows

The additional operating cash flow that an organization receives from taking on a new project.