Which of the Following Might a Company Try to Do

question 23

Multiple Choice

Which of the following might a company try to do to reduce the total amount of safety stock it holds?

• A) Implement and use ABC analysis of inventory items.
• B) Attempt to reduce variation in supplier lead times.
• C) Implement demand management approaches.
• D) A and B.
• E) All of these.

Analyze the effects of buying decisions on inventory levels and variance analysis.

Assess the impact of variances on performance evaluation systems.

Understand the treatment of year-end balances in variance accounts.

Recognize the role of engineers and other professionals in setting standard costs.

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Definitions:

Internal Controls

Processes and procedures designed to ensure the integrity of financial and accounting information, promote accountability and prevent fraud.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators.

Independent Internal Verification

A process within a company to check the accuracy and completeness of transactions by having them reviewed by a third party or separate department.

Segregation

In business or accounting, this often refers to the separation of duties or resources to prevent errors or fraud; in broader societal terms, it can mean the division of groups based on characteristics.