All of the Following Are Concepts Used in a Just-In-Time

question 144

Multiple Choice

All of the following are concepts used in a just-in-time inventory management system except

• A) supplies arrive just as they are needed.
• B) safety stock is kept to reduce stockouts.
• C) much waste is eliminated.
• D) purchases are made in small quantities.
• E) purchases are made frequently.

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Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to consumers.

Work in Process Inventory

Goods that are in the process of being manufactured but are not yet completed.

Direct Materials

Raw materials that are directly traceable and attributable to the manufacturing process of a product.

Overhead Application Rate

The overhead application rate is a calculated rate used to apply or allocate overhead costs to individual units of production, based on a specific formula, such as machine hours or labor hours.