Carrying More Inventory Upstream in a Multiechelon Supply Chain

question 98

Multiple Choice

Carrying more inventory upstream in a multiechelon supply chain

• A)decreases the extent of aggregation.
• B)increases the amount of inventory required.
• C)reduces the amount of inventory required.
• D)decreases the lead time.

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Definitions:

Long-Term Contracts

Agreements that extend over a long period, often used in industries like construction or supply services, specifying performance obligations and payment terms.

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term projects proportionally to the degree of completion.

Revenue Recognition

Guidelines that dictate when a company can report income, crucial for timely and fair financial reporting.

Completed Contract Method

An accounting technique used to recognize revenue and expenses of long-term contracts only after the project is completed.