Which of the Following Is Not a Benefit of Effective

question 84

Multiple Choice

Which of the following is not a benefit of effective sourcing decisions?

• A) Better economies of scale can be achieved if orders within a firm are aggregated.
• B) More efficient procurement transactions can significantly reduce the overall cost of purchasing.
• C) Sequential design results in products that are easier to manufacture and distribute, resulting in lower overall costs.
• D) Good procurement processes can facilitate coordination with the supplier and improve forecasting and planning.

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Definitions:

Factory Overhead Costs

Refers to indirect manufacturing costs that are not directly tied to a specific product, such as maintenance, utilities, and rent.

Machine Usage

Refers to the operation and utilization of machines in the production of goods or the provision of services, often tracked to optimize efficiency and maintenance.

Service Organization

A company that provides intangible products or services to customers, rather than physical goods.

Multiple Department Overhead Rate

A method where different overhead rates are used for various departments within a company, better reflecting the unique costs associated with each department.