A Firm That Uses a JIT Purchasing Philosophy Probably

question 5

Multiple Choice

A firm that uses a JIT purchasing philosophy probably:

• A)has many suppliers.
• B)has extensive inspection of purchased items at the receiving point.
• C)has relatively few suppliers.
• D)has deliveries of purchased items made in small lot sizes immediately before the goods are needed in production.
• E)has relatively few suppliers and has deliveries of purchased items made in small lot sizes immediately before the goods are needed in production.

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Definitions:

Constant Prices

Prices that have been adjusted for inflation, allowing for the comparison of economic data over time without the effects of price level changes.

Durable Goods

Durable goods are items with a long useful life, typically three years or more, such as appliances and vehicles, which consumers purchase with the expectation that they will not need to be replaced frequently.

Capital Equipment

Long-term assets such as machinery, vehicles, or infrastructure that a business uses in its operations to produce goods or services.

Depreciation

Depreciation is the process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in the asset's value over time.