In the 1980s,companies Started to Manage Their Inventories Much More

question 14

Multiple Choice

In the 1980s,companies started to manage their inventories much more closely than they had in the 1960s and 1970s.This was due to an increase in

• A) interest rates.
• B) the value of inventories in general.
• C) the value of the goods held in inventory.
• D) the creation of just-in-time inventory management systems.
• E) None of the above.

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Definitions:

Contribution Per Machine Hour

A measure of profitability that calculates how much profit or contribution is generated for every machine hour used in production.

Target Costing

A pricing strategy where a product's sale price is determined first, and then the production cost is targeted to ensure profitability.

Market-Based Pricing

A pricing strategy where the selling price of a product or service is determined by the current market conditions, including demand, competition, and cost of production.

Production Bottleneck

A condition that occurs when product demand exceeds production capacity.