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:

Option Contract

A financial derivative contract that grants the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date.

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.

European Calls

Options contracts that allow the buyer to purchase a stock or asset at a specific price on or before the expiration date, but only on that date.

Expiration Date

The final date by which an option or other financial instrument must be exercised or becomes void.