Which One of the Following Statements About Sales and Operations

question 129

Multiple Choice

Which one of the following statements about sales and operations planning is best?

• A) When a firm wants to minimize its inventory investment, it should use a level production-planning strategy.
• B) When a firm wants to emphasize stability in its workforce, it should adopt a level production-planning strategy.
• C) A make-to-stock production plan that wants to emphasize plant utilization should adopt a chase production strategy.
• D) A make-to-stock production plan that wants to minimize changes in production rates should adopt a chase production-planning strategy.

Evaluate the consequences of government-imposed quantity controls on market efficiency and surplus.

Explain the concepts of demand price, supply price, and how they determine market equilibrium.

Discuss the implications of removing trade barriers, such as quotas, on market prices and consumer surplus.

Examine the economic rationale and effects of licensing on market participants and overall market outcomes.

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Definitions:

Variable Costs

Charges that adjust in line with the scale of production or sales figures.

Variable Overhead Efficiency Variances

The difference between the actual variable overhead incurred and the standard cost of variable overhead that should have been incurred based on efficient operations.

Fixed Overhead Volume Variances

The difference between the budgeted and actual fixed overhead costs, attributed to changes in production volume.

Flexible Budget

A budget that adjusts or varies with changes in volume or activity levels.