Rinker Audio Products Is Uncertain Whether or Not to Introduce

question 77

Multiple Choice

Rinker Audio Products is uncertain whether or not to introduce a just-in-time (JIT) inventory system.While the head of manufacturing is opposed to it,its CFO is pushing for its adoption.The basic philosophy behind just-in-time (JIT) inventory systems is to

• A)economize on inventory holding costs.
• B)reduce inventory turnover.
• C)create a buffer stock of inventory.
• D)reduce costs by reducing quality.
• E)increase the total working capital requirement.

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Definitions:

Assets

Resources owned or controlled by an entity that are expected to produce economic value.

Balance Sheet

A Balance Sheet is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insight into its financial condition.

Service Revenue

Service revenue is the income a company generates from providing services, as opposed to selling physical goods.

Asset Increase

A rise in the total value of a company's assets, which can result from additional investments, improved asset values, or acquisition of new assets.