What Happens to a Firm with High Operating Leverage When

question 70

Multiple Choice

What happens to a firm with high operating leverage when the overall level of sales is very high?

• A) The firm will have higher levels of fixed costs.
• B) The firm will enjoy high profits.
• C) The firm will not break even in accounting terms.
• D) The firm will have a reduced level of fixed costs.

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Definitions:

CRM

Customer Relationship Management, a strategy and software for managing a company’s interactions with current and potential customers.

Order Fulfillment

The complete process from point of sale to delivery of a product to the customer, including processing, picking, packing, and shipping.

Marketing

The activities, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

SRM

Supplier Relationship Management (SRM) is the systematic, strategic coordination of business processes between an organization and its suppliers to optimize the value delivered through the supply chain.