Consider the Following Partial MPS Record

question 10

Multiple Choice

Consider the following partial MPS record. Beginning inventory is 40 units. The firm uses a fixed order quantity of 70 units. What is the projected available amount in period 3?

• A)45
• B)15
• C)70
• D)50
• E)155

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Definitions:

Management Policy

Guidelines and rules set by an organization's management to direct operations and decision-making in alignment with the company's objectives.

Credit Policy

A credit policy is a set of guidelines that a company follows to determine credit limits, payment terms, and how to manage delinquent accounts for its customers.

Terms of Sale

The conditions under which a sale is made primarily with respect to payment. Terms include a date on which payment is due and often specify a prompt payment discount that may be taken if payment is made within a specified time.

Lock Box Systems

A service provided by banks to companies for the quick collection of payments from customers by directing those payments to a special post office box.