In the Formula to Calculate the Average Waiting Time,the Manufacturing

question 39

Multiple Choice

In the formula to calculate the average waiting time,the manufacturing time is squared because:

• A)the shorter the manufacturing time,the less the chance that the machine will be in use when an order arrives.
• B)the longer the manufacturing time,the greater the chance that the machine will be in use when an order arrives.
• C)the longer the manufacturing time,the less the chance the machine will be in use when an order arrives.
• D)the shorter the manufacturing time,the greater the chance that the machine will be in use when an order arrives.

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Definitions:

Financial Leases

Financial leases are long-term leases in which the lessee is responsible for maintenance, taxes, and insurance, essentially treating the leased asset as if it were owned.

Cancellable

Refers to an agreement or financial instrument that can be terminated or voided by either party under predefined conditions.

Penalty

A punishment imposed for breaking a law, rule, or contract.

Tax-Oriented Leases

Leasing arrangements designed to pass tax advantages from the lessor, who owns the asset, to the lessee, who uses the asset.