Lean Systems Maintain Inventory in Small Lot Sizes Because Small

question 9

Multiple Choice

Lean systems maintain inventory in small lot sizes because small lot sizes:

• A) increase pipeline inventory, allowing the organization to buffer against demand uncertainties.
• B) increase the quality level of the product.
• C) enable schedules to use machine capacities more efficiently.
• D) increase manufacturing lead time because of the increase in waiting time.

Calculate net income and its components.

Estimate the cost of merchandise purchases.

Assess estimated finished goods inventory balances.

Analyze budgeted sales and the factors affecting them.

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Definitions:

Accounts Receivable

Funds that customers owe to a company for products or services provided but not yet compensated for.

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered or used, but not yet paid for.

Inventory

The total amount of goods and materials held by a company that are ready for sale or in the process of being produced.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share of the profits.