The primary role of cycle inventory is to allow

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9. The primary role of cycle inventory is to allow different stages in the supply chain to a. purchase product in lot sizes that maximize the sum of the material, ordering, and holding cost. b. purchase product in lot sizes that minimize the sum of the material, ordering, and holding cost. c. sell product in lot sizes that maximize the sum of the material, ordering, and holding cost. d. sell product in lot sizes that minimize the sum of the material, ordering, and holding cost. e. none of the above Answer: b Difficulty: Moderate 10. Economies of scale in purchasing and ordering motivate a manager to 11. Which of the following is not a situation in which any stage of the supply chain exploits economies of scale in its replenishment decisions? 12. The price paid per unit is referred to as
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13. All costs that do not vary with the size of the order but are incurred each time an order is placed are referred to as a. the material cost and is denoted by C. b. the fixed ordering cost and is denoted by S. c. the holding cost and is denoted by H. d. the purchase price and is denoted by P. e. none of the above Answer: b Difficulty: Moderate 14. The cost of carrying one unit in inventory for a specified period of time, usually one year, is referred to as 15. Which of the following would not be an example of a fixed ordering cost?
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