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An Intermediary Can Increase the Supply Chain Surplus by Aggregating

question 63

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An intermediary can increase the supply chain surplus by aggregating inventories across large numbers of customers.This is called


Definitions:

Machine-Hours

A measure of production volume or activity based on the number of hours machines are in operation.

Unused Capacity

The available production capability that is not being utilized by a company.

Capacity

It is the maximum level of output that a company can sustain to produce in a given period under normal conditions.

Job-Order Costing

A costing methodology that calculates the cost of individual jobs or batches, useful in manufacturing or service industries where jobs are distinct and have varying requirements.

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