Which of the following assumptions is FALSE regarding the application of the trial-and-error approach to developing a sales and operations plan?
A)Unit costs are independent of the quantity produced.
B)Cost is a nonlinear function of unit cost and the number of units.
C)When allowed,backlogs are assumed to exist for the entire period.
D)Production occurs at a uniform rate throughout each period.

Question

Quizplus · Accepted Answer

The assumption that cost is a nonlinear function of unit cost and the number of units is false. In reality, the cost may vary nonlinearly based on the quantity produced. The other assumptions, such as unit costs being independent of quantity produced, production occurring at a uniform rate, and backlogs existing for the entire period, are commonly used in the trial-and-error approach.

Which of the Following Assumptions Is FALSE Regarding the Application