Why Should Historical Experience Be Used with Caution in a Standard

question 121

Multiple Choice

Why should historical experience be used with caution in a standard setting?

• A) Historical experience can perpetuate inefficiencies.
• B) Historical experience provides very rigorous guidelines.
• C) Standards based on historical experience are better than standards based on engineering studies.
• D) Operating personnel may not be able to achieve operating standards based on historical experience.

---

Definitions:

Terms of Sale

Conditions agreed upon by the buyer and seller regarding the delivery, payment, and ownership of goods.

Credit Analysis

The process of evaluating an individual's or entity's ability to repay debt obligations based on their financial history, current assets, and liabilities, and income stability.

Discount Period

It refers to the time frame in which a discount is available for early payment under the credit terms of a transaction.

Credit Period

The time frame allowed by a creditor for a debtor to pay an outstanding bill or loan without incurring penalties or interest.