When Safety Stock Is Deemed Absolutely Necessary, the Usual Policy

question 80

Multiple Choice

When safety stock is deemed absolutely necessary, the usual policy is to build it into which category of the MRP logic?

• A) Gross Requirements
• B) Scheduled Receipts
• C) Projected On Hand
• D) Net Requirements
• E) Planned Order Receipts

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Definitions:

Product Margin

The difference between the selling price of a product and the cost of goods sold (COGS), indicating the profit per unit sold.

Direct Labor Cost

The total amount of wages paid to employees who are directly involved in the manufacturing or production process.

Meeting With Clients

A business activity where representatives of a company interact with its clients to discuss services, products, or ongoing projects.

Activity Cost Pools

Groupings of individual costs based on the activities that cause the company to incur these costs, used in activity-based costing.