Sample Questions for Midterm 2 (1).docx

Sample Questions for Midterm 2 (1).docx - Inventory...

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Inventory Management 1.The annual demand of a product is 5000, which costs $ 50each. Annual Storage costs, which include insurance and cost of capital, amount to $10 per unit of average inventory. Every time an order is placed , it costs $20 per order. What is the annual cost for storing the product ,if the economic order quantity is 100. 2.What is the basic purpose of inventory analysis? A. To provide precise inventory valuations when generating accounting records for the firm's annual report. B. Because there are costs for making each new production setup, inventory allows management to reduce the number of setups. C. To provide a safeguard for variation in raw material delivery time. D. To take advantage of economic purchase order size. E. To specify when items should be ordered and how large the order should be.
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  • Spring '08
  • WELTMAN
  • Exam 2 Kuldeep Singh

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