Using a Fixed Quantity System (FQS), as the Reorder Point

question 24

Multiple Choice

Using a fixed quantity system (FQS) , as the reorder point increases

• A)safety stock increases
• B)safety stock decreases
• C)the number of orders increases
• D)the number of orders decreases

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Definitions:

Work in Process Inventory

The total value of unfinished goods that are in the process of being manufactured at a given period.

Raw Materials Inventory

The stock of primary materials used in the manufacturing process before they are converted into finished goods.

Factory Labor

The direct and indirect labor costs incurred in manufacturing products, including wages and benefits of workers involved in production.

Total Manufacturing Costs

Sum of all costs directly involved in the manufacturing of a product, including raw materials, labor, and overhead expenses.