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:

Bargain Purchase Price

A price for an asset that is significantly below its fair market value.

CRA

Credit Risk Analysis, assessing the risk of default on a loan by evaluating the potential borrower's creditworthiness, or it could stand for Canada Revenue Agency, the federal agency responsible for tax laws for the Canadian government.

Operating Lease

A lease agreement allowing the use of an asset without ownership, typically with shorter terms than capital leases.

Lessor

An entity that leases property or equipment to a lessee in exchange for rental payments.