Allison has developed a set of procedures for determining the amount of each raw material she needs to have in inventory if she is to keep the assembly lines operating efficiently. These procedures are commonly referred to by which one of the following terms?
A) First-in, first-out method
B) The Baumol model
C) Net working capital planning
D) Economic order procedures
E) Materials requirements planning

Question

Quizplus · Accepted Answer

The set of procedures described in the question are commonly known as materials requirements planning (MRP), which involves calculating the amount of each raw material needed to meet production goals and ensure efficient operation of the assembly line. Option A refers to a method of inventory management, option B is a model for determining optimal inventory ordering quantities, option C refers to managing short-term assets and liabilities, and option D is a method for determining the optimal ordering quantity and timing for inventory.

Allison Has Developed a Set of Procedures for Determining the Amount