Uncertainty in Demand and Economic Factors Should Be Included in the Financial

question 77

Multiple Choice

Uncertainty in demand and economic factors should be included in the financial evaluation of supply chain design decisions because

• A)the exclusion of certainty may have a significant impact on this evaluation.
• B)the exclusion of uncertainty will not have a significant impact on this evaluation.
• C)the inclusion of certainty may have a significant impact on this evaluation.
• D)the inclusion of uncertainty may have a significant impact on this evaluation.

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Definitions:

Variable Cost Per Unit

The cost that changes in proportion to changes in the level of output or activity.

Income From Operations

The profit realized from a business's ongoing core business operations, excluding deductions of interest and taxes.

Break-even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Variable Cost

Costs that vary directly with the level of production or output. These are often raw material and labor costs that increase or decrease with the volume of production.