Years Ago, a Hardware Store Had a Sign That Said

question 79

Essay

Years ago, a hardware store had a sign that said, "If we don't have it, you don't need it." How is the implementation of a quick response system the complete opposite of this marketing philosophy?

---

Definitions:

Allocation Base

A criterion or measure used for distributing overhead costs among various cost objects, such as machine hours, labor hours, or units produced.

Machine-Hours

A measure of production volume expressed in the total number of hours that machines are operated.

Departmental Predetermined Overhead Rates

Rates used to allocate overhead costs to products, calculated in advance for each department based on estimated overheads and activity levels.

Machine-Hours

An index of manufacturing productivity determined by the total hours of machine operation.