A System in Which Companies Purchase Raw Materials Only When

question 73

Multiple Choice

A system in which companies purchase raw materials only when needed is called

• A) ABC.
• B) Traditional production system
• C) internal failure costs.
• D) JIT production.

---

Definitions:

F.O.B.

F.O.B. (Free on Board) is a shipping term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping.

Free On Board

A shipping term indicating that the seller bears transportation costs to the shipping point, after which the buyer is responsible.

Freight Order Billing

The process of issuing invoices for the transportation services provided for shipping goods, based on agreed terms such as weight, distance, and type of goods.

Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.