Minimizing Inventory by Providing an Almost Continuous Flow of Items

question 27

Multiple Choice

Minimizing inventory by providing an almost continuous flow of items from suppliers to the production facility is referred to as

• A) just-in-time management.
• B) economic ordering.
• C) material requirements planning.
• D) logistics.
• E) operations management.

Recognize the assumptions and limitations of theoretical models such as the MM and Miller models, especially concerning taxes and bankruptcy costs.

Identify the factors influencing a firm's decision to adjust its debt ratio and the principle of the trade-off theory.

Analyze the effect of capital structure on a firm’s weighted average cost of capital (WACC) and its valuation.

Understand the relationship between a firm's operating leverage, business risk, and capital structure.

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Definitions:

Psychoanalytic Theory

A theoretical framework developed by Sigmund Freud that emphasizes unconscious mental processes and childhood experiences in shaping personality and behavior.

Inner Drives

The innate impulses or motivations that inspire individuals to take action or behave in certain ways.

Psychosexual Stages

A Freudian theory that proposes five stages of childhood development, each characterized by the erogenous zone that is the source of the child's psychosexual energy.

Developmental Theory

A group of ideas, assumptions, and generalizations about human growth. A developmental theory provides a framework to interpret growth and change.