If S Indicates the Number of Backorders That Have Accumulated

question 56

Multiple Choice

If S indicates the number of backorders that have accumulated by the time a new shipment of size Q is received,and we ship existing backorders to our customers and place the remaining units in inventory,then __________ is the maximum inventory we subsequently have on hand.

• A)Q
• B)Q − S
• C)S
• D)(Q − S)/2

---

Definitions:

Production Budget

A plan that outlines the expected production in units, considering sales forecasts and inventory requirements.

Direct Labor-Hours

The total hours worked directly on the production of goods or the provision of services.

Direct Labor Rate

The cost per hour for direct labor incurred in the production of goods.

Production Budget

An estimation of the total cost and resources needed for a company to produce a set amount of goods in a given period.