Describe the Two Key Factors That Influence the Optimal Level

question 63

Essay

Describe the two key factors that influence the optimal level of product availability within a supply chain.

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Definitions:

Actual Hours

The real number of hours worked, as opposed to the planned or standard hours set for a job or task.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (or standard) cost, multiplied by the quantity of materials purchased.

Standard Quantity

The expected amount of materials or inputs required to produce a single unit of product under normal conditions.

Actual Materials Purchased

The total quantity and cost of raw materials bought by a company for production during a specific period.