How Does Pull-Through Production Help Minimize Inventories in a Just-In-Time

question 1

Multiple Choice

How does pull-through production help minimize inventories in a just-in-time operating environment?

• A) Products are made in anticipation of customer demand.
• B) Products are made only when customer orders are received.
• C) Products are made in large production runs.
• D) Products are made identically.

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Definitions:

Tax-Deductibility

The feature of certain expenses that can be subtracted from gross income to reduce taxable income and lower the tax bill.

Interest Expense

The cost incurred by an entity for borrowed funds; this can include payments on loans, bonds, or lines of credit.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Book Value

The net value of a company's assets minus its liabilities, often used to assess a company's financial health.