The Benefits of Pooling Include

question 23

Multiple Choice

The benefits of pooling include

• A) lower levels of safety stock
• B) reduced transportation costs from plant to distribution center
• C) reduction in demand uncertainties
• D) all of the above

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Definitions:

Fixed Overhead

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance premiums.

Direct Labour

The workforce directly involved in the manufacturing or production process.

Net Operating Income

Net operating income is the total profit of a business after subtracting operating expenses but before deducting taxes and interest charges.

Target Costing

A pricing method that involves reversing the traditional cost-plus formula to determine allowable costs based on market price and desired profit.