In the Theory of Constraints, the Only Direct Costs Are

question 88

Multiple Choice

In the theory of constraints, the only direct costs are:

• A)investment costs
• B)direct material
• C)direct material and direct labor
• D)direct material, direct labor, and variable overhead costs

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Definitions:

Variable Cost

A cost that changes in proportion to the level of output or activity in a business.

Supply Chain Surplus

Supply chain surplus is the difference between the value a product provides to the customer and the costs of the supply chain in delivering the product.

Warehousing Needs

The requirements related to the storage, handling, and management of goods and materials in a warehouse.

Supplier Performance

The evaluation of how effectively and efficiently a supplier meets the requirements and expectations set by the buyer, including delivery, quality, and cost.