Consider a Business That Can Be Run Using a Make-To-Stock

question 30

Multiple Choice

Consider a business that can be run using a make-to-stock or make-to-order process. Further suppose that your demand is 10000 per month and is spread out during the month. Capacity of both processes is 15000 per month.Based only on this information, what would be the best choice?

• A)Choose Make-to-stock process.
• B)Choose make-to-order process.
• C)Either A or B.
• D)Both A and B
• E)None of the above.

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Definitions:

After-Tax Salvage

The net value of an asset after subtracting taxes associated with its sale or disposal.

Stand-Alone Principle

A method of evaluating the attractiveness of an investment project by analyzing its cash flows as if it were the only project undertaken by the firm.

Bell's Theorem

A fundamental theorem in quantum mechanics that shows how some quantum predictions can be strongly at odds with local realism.

Equivalent Annual Cost

The cost per year of owning and operating an asset over its entire lifespan.