One use of inventory is
to provide a hedge against inflation
WOTF is NOT a type of inventory?
ABC analysis divides an organization’s on-hand inventory into three classes based upon
annual dollar volume
WOTF does NOT belong to ordering costs?
What is the cost to prepare a machine or process for production?
A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution is referred as
a probabilistic model
What is a system for ordering items that have little or no value at the end of a sales period?
single-period inventory model
For seasonal products, the service level should be set to equal
shortage cost/ (overage cost + shortage cost)
A system that triggers ordering on a uniform time basis is called
a fixed-period system
WOTF is NOT one of the assumptions of fixed-period systems?
Lead times are variable.
A single-period inventory model is NOT applicable for
The objective of inventory management is to
strike a balance between inventory investment and customer service
The appropriate level of safety stock is typically determined by
choosing the level of safety stock that assures a given service level
WOTF does NOT belong to holding costs?
In the single-period inventory model, the overage cost is
cost per unit – salvage value per unit
Inventory control models assume that demand for an item is
either independent of or dependent on the demand for other items
Inventory record accuracy would be decreased by
increasing stockroom accessibility
WOTF types of inventory describes inventory that has been purchased but not processed??
raw material inventory
A system that keeps track of each withdrawal or addition to inventory continuously is
a perpetual inventory system