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Stock-out costs
These are the opportunity costs of running out of stock. They comprise:
1) The costs of lost customer sales, and therefore lost contribution to fixed costs.
2) Potential loss of goodwill with customers whose demand cannot be net.
3 Acquiring emergency supplies at higher prices to meet demand.
4) Cost production of finished goods, where raw material stock-outs occur.
The computation of safety stocks lingers on demand forecasts. The manager will have some notion (usually based on past experience) of the range of daily demand. That is the probability that exists for usage of various quantities.
The decisions about long-term investment are depends on judgments on future cash flows, the improbability of such cash flows and the opportunity cost also of the funds to be invest
Accounting Profit is a company's sum total earnings, computed according to Generally Accepted Accounting Principles (GAAP), and involves the explicit costs of operating business, l
accounting process or accounting cycle
the break even point in dollorsales for rice company is48,000 and the company's contribution margin ratio is 40 percent. If Rice Company desires a profit of $84,000, how much wou
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areas where zero based budgeting can be effectively used?
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