Which of the following would not be included in

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16. Which of the following would not be included in holding cost? a. cost of capital b. cost of physically storing the inventory c. cost of manufacturing d. cost that results from the product becoming obsolete e. none of the above Answer: c Difficulty: Moderate 17. The total annual cost is the sum of annual material cost, annual order cost, and annual holding cost, and is given as
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18. Total ordering and holding costs 19. If demand increases by a factor of k, the optimal lot size increases by a factor of 20. If demand increases by a factor of k, the number of orders placed per year should increase by a factor of a. k . b. k /2. c. k + 2. d. k -squared. e. the square root of k . Answer: e Difficulty: Moderate 21. To reduce the optimal lot size by a factor of k , the fixed order cost S must be 22. Aggregating across products, retailers, or suppliers in a single order allows for 23. Aggregating across products, retailers, or suppliers in a single order allows for a reduction in lot size for individual products because
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24. A key to reducing cycle inventory is a. the reduction of holding cost. b. the reduction of manufacturing cost. c. the reduction of lot size. d. the reduction of warehouse space. e. all of the above Answer: c Difficulty: Moderate
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