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What Risk Is Assumed by an Underwriter When Issuing a Firm

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Essay

What risk is assumed by an underwriter when issuing a firm commitment to a corporation? Will the corporation be better off with the firm commitment?


Definitions:

Gross Requirements Plan

A schedule that specifies the amount and timing of future material and component requirements necessary to fulfill the production plan.

Net Requirements Plan

An output of the manufacturing planning process that identifies the quantity and timing of future material or product demands based on current inventory levels and scheduled supply.

MRP II

Manufacturing Resource Planning, an integrated method of operational and financial planning for manufacturing companies, an evolution of Material Requirements Planning (MRP).

MRP

Material Requirements Planning; a system for planning and managing inventory levels, production schedules, and purchasing needs in the manufacturing process.

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