When the Reorder Point R Exceeds Q*,the Difference Is

question 38

Multiple Choice

When the reorder point r exceeds Q*,the difference is

• A)safety stock.
• B)one or more outstanding orders.
• C)surplus inventory.
• D)backorders.

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Definitions:

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Revenue Expenditure

Expenses incurred by an organization in its day-to-day operations which do not add to the value of an asset.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs associated with production or acquisition of goods.

Depreciable Cost

Depreciable cost is the cost of a fixed asset that is subject to depreciation over its useful life, excluding salvage value.