Cips L4m2 Defining Business Need Study Guide Rated A+

Safety Stock {Ans: A level of stock that is there to cater for above average usage during the replenishment lead time and so avoid a stockout}Break-Even Point (BEP) {Ans: When total costs are equivalent to sales revenue (after this, it is profit)}Direct Costs {Ans: Directly associated with the production of a good or service e.g. a component}Modified Re-Buy {Ans: The purchase of an item that was purchased previously but with changes to the specification or supplier}An industry is defined by... {Ans: A seller}Establishing Requirements - Starburst Method {Ans: Who What When Where Why How}