Which of the Following Is Most Likely to Be Categorized

question 181

Multiple Choice

Which of the following is most likely to be categorized as an external failure cost?

• A)the cost of testing a product before shipment
• B)the cost of machinery maintenance to avoid breakdowns during production
• C)the cost of lost future sales after a customer finds a defect in a product
• D)the cost of inspection of materials to be used in production

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Definitions:

Customer Inquiries

Any form of communication from customers seeking information about products, services, or the company.

Sales Order

A document issued by a business to a customer, confirming the sale of goods or services under specified terms.

Economic Order Quantity

The optimal quantity of stock to order at one time, considering holding costs and ordering costs, to minimize total inventory costs.

Safety Stock

Additional inventory kept on hand to prevent stockouts caused by fluctuations in demand or supply delays.