A Company That Uses a Just-In-Time Inventory System

question 123

Multiple Choice

A company that uses a just-in-time inventory system:

• A) has finished goods inventory on hand at all times in order to speed up shipments of customer orders.
• B) may find that having less inventory actually leads to increased customer satisfaction.
• C) assesses its value chain to create new value-added activities.
• D) adopts a systematic, problem-solving attitude.

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Definitions:

Target Costing

A pricing method that involves determining the desired cost for a product to ensure profitability at its anticipated selling price.

Desired Return

The profit or return that an investor or company aims to achieve on an investment or project.

Investment

The dedication of assets to achieve an increase in value over time, including purchases of securities, real estate, and other items with the expectation of generating future income or profit.

Target Costing

A pricing strategy where a product's selling price is determined first based on market conditions, and then the goal is to meet or come under this price through cost control and design efficiencies.