Voluntary Costs Refer to Internal and External Failure Costs

question 43

True/False

Voluntary costs refer to internal and external failure costs.

---

Definitions:

Production Order Quantity Model

An inventory management model that determines the optimal order quantity to minimize total inventory costs.

Inventory Reconciliation

The process of verifying that actual inventory matches recorded inventory, often involving adjustments for discrepancies.

Raw Material Inventory

Materials that are usually purchased but have yet to enter the manufacturing process.

Safety Stock Computation

The calculation of a buffer quantity of inventory kept on hand to prevent stockouts, based on variability in demand and supply.