Sensitivity Analysis Is Defined as

question 10

Multiple Choice

Sensitivity analysis is defined as

• A)a diagnostic,analytic method for analyzing the effects of changing factors such as inventory costs to determine the effects.
• B)a family of parts or products run on the same line.
• C)a good production management reaction to order cancellations after the fact.
• D)adaptation to a shift from continuous demand to sporadic demand.

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Definitions:

Factory Overhead

All indirect costs associated with manufacturing, such as indirect labor, maintenance, and utilities, not directly tied to a specific product.

Direct Labor Hours

The total number of work hours spent by employees who directly manufacture or produce goods.

Predetermined Overhead Rate

An estimate used to allocate overhead costs to products or job orders, calculated before the costs are incurred.

Finished Goods

Items that are finished with the production phase but are still awaiting sale or delivery to consumers.