The Bill of Material (BOM) for Products a and B

question 20

Multiple Choice

The bill of material (BOM) for Products A and B are shown below followed by a table of inventory data (called Exhibit 1) . The master production scheduling (MPS) for A calls for 150 units of A to be completed in Week 4 and another 225 units to be completed in Week 5. End item A has a two-week lead time. The MPS calls for 400 units of B to be completed in Week 6. End item B has a one-week lead time. Exhibit 1
$\begin{array}{|l|l|l|l|}\hline \text { DATA CATEGORY } & \text { C } & \text { D } & \text { E } \\\hline \text { Lot Sizing Rule } & \text { FOQ }=800 & \text { LFL } & \text { POQ =4 } \\\hline \text { Lead Time } & 1 \text { week } & 2 \text { weeks } & 1 \text { week } \\\hline \text { Scheduled Receipt } & 400 \text { (Week 1) } & 80 \text { (Week 1) } & \text { None } \\\hline \text { Beginning Inventory } & 80 & 60 & 100 \\\hline\end{array}$ ____________________________________________________________________
-Using the data given in Exhibit 1, determine the projected on-hand inventory for Item C, beginning in Week 8.

• A) 800 units
• B) 645 units
• C) 155 units
• D) 0 units

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Definitions:

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered or altered by current or future actions.

Decision Making

Selecting a course of action from competing alternatives.

Avoidable Cost

Costs that can be eliminated if a particular decision is made, such as discontinuing a product or service.

Sunk Cost

A cost that has already been incurred and that cannot be changed by any decision made now or in the future.