Which of the Following Is Not an Explanation of 'Cost

question 40

Multiple Choice

Which of the following is not an explanation of 'Cost Reductions'? 

• A) Purchasing cost reductions are not sustainable in character. These may be the result from a change of the specification, a change of supplier, or omitting an unnecessary product quality requirement. 
• B) Purchasing cost reductions are sustainable in character. These may be the result from a change of the specification. 
• C) Purchasing cost reductions are sustainable in character. These may be the result from a change of supplier. 
• D) Purchasing cost reductions are sustainable in character. These may be the result of omitting an unnecessary product quality requirement.

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Definitions:

Specialization

The process in which individuals, firms, or countries focus on producing a narrow range of products or services, often to improve efficiency and productivity.

Division of Labor

The allocation of different tasks to different people or groups in an effort to increase efficiency and productivity.

Productivity

A measure of the efficiency with which goods and services are produced, often quantified as output per unit of input.

Economic Profits

The surplus after a firm subtracts its total costs from its total revenue, considering both explicit and implicit costs.