1Chapter 12: Multiple Choice Questions 1. Which of the following is a function of inventory? a. to decouple or separate parts of the production process b. to provide a stock of goods that will provide a selection for customers c. to take advantage of quantity discounts d. to hedge against inflation e. all of the above are functions of inventory 2. Which of the following would not generally be a motive for a firm to hold inventories? 3. All of the following statements about ABC analysis are true except 4. ABC analysis is based upon the principle that 5. Which of the following statements about ABC analysis is false? a. ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. b. In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers. c. In ABC analysis, "C" Items have minimal records, periodic review, and simple controls. d. ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
- Fall '09
- order quantity, basic EOQ model