An Experienced Operations Manager Can Tell at a Glance Whether

question 19

True/False

An experienced operations manager can tell at a glance whether an item should be classified as safety stock, anticipation inventory, or cycle stock.

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Definitions:

Diminishing Returns

A rule indicating that after reaching a specific threshold, further investments in a given sector will not yield higher profits at the same rate if all other factors stay unchanged.

Marginal Cost

The heightened expense incurred by fabricating an extra unit of a product or service.

Average Total Cost

The overall expense of manufacturing, including both fixed and variable costs, divided by the amount of product made.

Extra Unit

Refers to an additional quantity of a good or service, often used in the context of calculating marginal costs or benefits.