The Opportunity Cost of an Item Is

question 140

Multiple Choice

The opportunity cost of an item is:

• A) the number of hours needed to earn money to buy it
• B) what you give up to get that item
• C) always less than the dollar value of the item
• D) always equal to the dollar value of the item

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Definitions:

Lost Profits

The potential earnings that were not realized due to unforeseen circumstances, disruptions in business, or decisions that led to lost sales opportunities.

Planning Horizon

The future time period for which plans, strategies, and decisions are made, varying in length depending on the goals and nature of the planning.

Forecasting Errors

Discrepancies between predicted and actual demand, often leading to inventory mismanagement.

Safety Capacity

The extra capacity created within a system to accommodate unexpected demand or to compensate for potential system failures.