When Would an MRP Inventory Approach Be a Preferred to a JIT

question 84

Multiple Choice

When would an MRP inventory approach be a preferred to a JIT inventory approach?

• A) when a product has a short life cycle
• B) when demand for inventory is fairly predictable
• C) when demand for inventory is very unpredictable
• D) MRP is always a preferred method over JIT.

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Definitions:

Cash-flow Hedge

A financial strategy used to manage risk associated with variability in cash flows due to changes in exchange rates, interest rates, or commodity prices, by using derivatives.

Net Exchange Gain

The profit from exchanging one currency for another after accounting for currency fluctuations and transaction costs.

Forward Contract

A tailor-made agreement between two entities to purchase or sell a specific asset at a predetermined price on a future date.

Forward Contract

A financial contract between two parties to buy or sell an asset at a specified future time at a price agreed upon today, not traded on an exchange.