Mike Is a Sales Representative for Fastenal and ​Calls on Manufacturer

question 10

Multiple Choice

Mike is a sales representative for Fastenal and ​calls on manufacturer accounts in his territory.Most of the manufacturers utilize a just-in-time inventory system whereby they rely on suppliers like Fastenal to maintain appropriate levels of stock so they can minimize their inventory carrying costs and strive to balance the inventory in order to ensure they have the right levels of inventory for their production.Mike provides value-added services to assist these customers in identifying their inventory needs and tracks the inventory levels to ensure the customer's goals are met.This value-added service is known as a(n) :

• A)​vendor-managed inventory
• B)​key account selling
• C)​quick-response inventory management
• D)​customer relationship management

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Definitions:

Fixed Cost

Costs that remain constant regardless of the amount of goods produced or sold, including expenses like lease payments, employee wages, and insurance fees.

Variable

A characteristic, number, or quantity that can change or vary, taking on different values in a mathematical model, statistical experiment, or real-life situation.

Output

The quantity of goods or services produced by a firm, industry, or economy within a certain period.

AVC

Average Variable Cost, which is the variable cost per unit of output, typically analyzed in the short run.