Which of the Following Should Be a Feature of an Outsourcing

question 52

Multiple Choice

Which of the following should be a feature of an Outsourcing Service Level Agreement (SLA) ? 

• A) It should never be updated. 
• B) It should not reflect the overall business goals. 
• C) It should allow for the supplier to make changes to the SLA. 
• D) It should be comparable against pre-determined criteria.

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Definitions:

Safety Stock

Additional inventory beyond expected demand, kept on hand to prevent stockouts typically caused by uncertainties in supply or demand.

Inventory

The total amount of goods and materials held by a company intended for sale or used in production, crucial for managing supply chains and fulfilling customer orders.

Economic Order Quantity

A formula used to determine the ideal order quantity that minimizes the total costs of inventory, including holding costs and ordering costs.

Shortage Cost

Shortage cost refers to the costs a company incurs when it is unable to meet demand due to insufficient inventory or resources.