Which of the Following Is an Approach a Company Can

question 82

Multiple Choice

Which of the following is an approach a company can use to create a buffer for forecast error using safety inventory?

• A)Overtime
• B)Carry extra workforce permanently
• C)Build and carry extra inventories
• D)Subcontracting

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Definitions:

Average Total Cost

The total cost divided by the quantity produced, indicating the cost to produce each unit of output.

Resource Prices

The cost associated with acquiring resources necessary for production, including raw materials, labor, and capital.

Increasing-Cost Industry

An industry where production costs begin to rise as the industry's output expands, often due to resource limitations or increased prices of inputs.

Minimum Long-Run ATC

The lowest point on the Average Total Cost curve when a firm operates in an efficient scale over the long term.