An Order Is Received by a Company and Then Spends

question 143

Multiple Choice

An order is received by a company and then spends 1 day in assembly and 3 days in finishing before being stored in the warehouse. On average, the units are stored for 3 days before being shipped to a customer. Which of the following measures would be true?

• A) work-in-process time of 7 days
• B) manufacturing cycle time of 4 days
• C) pass-through time of 6 days
• D) manufacturing cycle time of 7 days

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Definitions:

Variable Cost

Costs that vary directly with the level of production or volume of output.

ATC Curve

The ATC (Average Total Cost) Curve is a graphical representation of how a firm's average total costs vary with output level, highlighting the cost efficiency of producing goods.

ATC Curve

The average total cost curve, which represents the per-unit total cost (fixed plus variable costs) of production for varying quantities of output.

Short Run

A time period in economics where at least one factor of production is fixed, limiting the immediate response of a firm to changes in market conditions.