In Conducting Aggregate Operations Planning, There Are a Number of Required

question 19

Multiple Choice

In conducting aggregate operations planning, there are a number of required inputs. Which of the following inputs are considered external to the firm?

• A) Competitor behavior and economic conditions
• B) Market demand and inventory levels
• C) Subcontractor capacity and current workforce
• D) Economic conditions and current physical capacity
• E) Raw material availability and inventory levels

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Definitions:

Fixed Cost

Fixed costs, including rent, salaries, and insurance, stay the same no matter how much is produced or sold.

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, contributing towards covering fixed costs and earning profit.

Break Even Point

The point at which total costs and total revenue are equal, meaning the business is neither making a loss nor a profit.

Unit Contribution Margin

The amount each unit sold contributes towards covering fixed costs and generating profit, calculated as the sales price per unit minus variable cost per unit.