The bullwhip effect causes
A) maximization of supply chain surplus.
B) improved accuracy of demand information within the supply chain.
C) different stages of the supply chain to have a very different estimate of what demand looks like.
D) less need for aggregate planning.
Answer: C
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CM Company manufactures a component used in the production of one of its main products
The following cost information is available: Direct materials $420 Direct labor (variable) 110 Variable manufacturing overhead 80 Fixed manufacturing overhead 30 A supplier has offered to sell the component to CM for $650 per unit. If CM buys the component from the supplier, the released facilities can be used to manufacture a product that would generate a contribution margin of $10,000 annually. Assuming that CM needs 4,000 components annually and that the fixed manufacturing overhead is unavoidable, what would be the impact on operating income if CM outsources? A) Operating income would decrease by $150,000. B) Operating income would increase by $10,000. C) Operating income would decrease by $10,000. D) Operating income would increase by $160,000.
Free alongside ship (FAS) named port is the Incoterm for a transaction in which the seller places the shipment alongside the vessel upon which the goods will be transported out of the country
Indicate whether the statement is true or false