If We Are Producing the Product or Component In-House,then the Total

question 85

Multiple Choice

If we are producing the product or component in-house,then the total inventory-related cost on an annual basis is ______.

• A)the sum of total annual setup cost and total annual holding cost less the sum of total annual stock-out cost and total annual materials purchase cost
• B)the ratio of the sum of total annual setup cost and total annual holding cost to the sum of total annual stock-out cost and total annual materials purchase cost
• C)total annual setup cost + total annual holding cost + total annual stock-out cost + total annual materials purchase cost
• D)the product of the sum of total annual setup cost and total annual holding cost to the sum of total annual stock-out cost and total annual materials purchase cost

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Definitions:

Forward Exchange Contract

An agreement to exchange currencies at a specified rate on a predetermined future date, used to hedge against currency risk.

Net Income

The net income of a company, calculated by deducting all costs and taxes from the overall revenue.

Local Currency Units

Local currency units refer to the currency that is legal tender in a country's domestic economy and used to present financial information.

Exchange Rates

The pace at which one form of money can be traded for another, impacting worldwide commerce and investment activities.