Answer: base-stock system Reference: Inventory Control Systems Difficulty: Moderate
Chapter 12 Inventory Management503 Keywords:base, stock, base-stock 132.Inventory manager George Costanza knows too well that shrinkage occurs so he goes to the stock room every day to do a spot check of a few items, physically counting them to verify that his count agrees with the number indicated by their computerized inventory system. This method of inventory control is known as ____________. Answer: cycle counting Reference: Inventory Control Systems Difficulty: Moderate Keywords:cycle, count, counting SHORT ANSWERS 133.What are the components of holding cost? Answer: The components of holding cost include cost of capital, storage and handling cost, taxes, insurance, and shrinkage. Reference: Inventory Basics Difficulty: Moderate Keywords:holding, cost 134.What are the secondary levers for cycle inventory? 135.What are the secondary levers for safety stock inventory? 136.What are the secondary levers for pipeline inventory?
137.What are the options for placement of inventories and how are these decisions made? Answer: Inventories can be held at the raw material, work-in-process, and finished-goods levels. Managers make inventory placement decisions by designating an item as either a special or a standard. A special is an item made to order or, if purchased, it is bought to order. A standard is an item that is made to stock or ordered to stock and is normally available upon request. Reference: Inventory Basics Difficulty: Moderate Keywords:special, standard, placement138.What is ABC analysis and how does it work?
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