[jeff]

– The NINJAs are giving away a NINJA MCQ section of the winner’s choice.

– To enter the drawing, simply post an answer – (you don’t have to get it correct to be picked).

– The winner will be randomly selected

– You can gift your winning section to someone else (i.e. people who already passed can participate)

– Deadline: Today – 4pm Eastern

Today’s NINJA MCQ Question:

A pillow manufacturer tracks its production manually. That process results in continuing inaccuracies in inventory and production records on monthly production of about 1 million pillows in three plants. Not knowing how much raw materials inventory is needed, the company maintains surplus inventory of about 25 days production usage at each plant so it can meet its delivery commitments. The company believes it would be advantageous to implement electronic data interchange (EDI) with its suppliers to facilitate just-in-time inventory management.

If implementing electronic data interchange (EDI) with suppliers permitted more frequent orders and more frequent communication about them, the company could be more effective by using electronic data interchange (EDI) to:

A reduce costs by reducing raw materials inventory.

B ensure that it always maintained a 25-day buffer stock.

C track materials through production to completed orders.

D schedule production to reduce the number of setups required.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Gillitl11]

A

[jackaroe]

A

[jeff]

Update:

Answer: A

If implementing electronic data interchange (EDI) with suppliers permitted more frequent orders and more frequent communication about them, the company could reduce costs, e.g., inventory carrying costs, by reducing raw materials inventory.

The company could ensure that it always maintained the 25-day buffer stock, but there would be no reason to do so if it could ensure more reliable deliveries by ordering more frequently.

Tracking materials through production and scheduling production (intracompany processes) are not a use of electronic data interchange (EDI), which is intercompany exchange of business information.

***

Winner: katsamorgan!

Please email jeff@another71.com and let me know what section of NINJA MCQ you'd like.

Thank you everyone we'll do this again this week.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Author]

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