The Arguments That Support Making Component Parts In-House (I

question 2

Multiple Choice

The arguments that support making component parts in-house (i.e.vertical integration) are fourfold:

• A) lower costs, facilitates investments in highly specialized assets, protects proprietary product technology and, facilitates the scheduling of adjacent processes
• B) greater flexibility, helps a firm capture orders from international customers, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
• C) helps a firm capture orders from international customers, lower costs, facilitates investments in highly standardized assets and, facilitates the scheduling of adjacent processes
• D) lower costs, greater flexibility, facilitates the scheduling of adjacent customers and, facilitates investments in highly specialized assets
• E) greater efficiencies, better quality control, protects against technology theft, and more responsive to customers

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Definitions:

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management.

LIFO

"Last In, First Out," an inventory valuation method where the latest goods purchased are the first to be sold.

Inventory Cost Card

A record-keeping tool that tracks the cost associated with a specific item of inventory, detailing purchases, sales, and adjustments.

Perpetual Inventory System

An inventory management system where updates to inventory records are made in real-time following each sale or purchase transaction.