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31. Safety stock is held because we anticipate future demand. True False 32. Variability in demand and/or lead time can be compensated for by safety stock. True False 33. Solving quality problems can lead to lower inventory levels. True False 34. ROP models assume that demand during lead time is composed of a series of dependent daily demands. True False 35. Pro?t margins tend to be inversely related to inventory turns. True False 36. In the ?xed-order interval model, the order size is the same for each order. True False 37. The ?xed-order interval model requires a continuous monitoring of inventory levels. True False 38. Discrete stocking levels are used when an organization doesn’t want visibility of inventory levels. True False 39. The ?xed-order interval model requires a larger amount of safety stock than the ROP model for the same risk of a stockout. True False 40. The single-period model can be very helpful in determining when to order. True False 41. The single-period model can be very helpful in determining how much to order. True False 42. Monitoring inventory turns over time can be used as a measure of performance. True False 43. A single-period model would be used mainly by organizations going out of business. True False 44. The basic EOQ model ignores the purchasing cost. True False 45. When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of customer goodwill. True False 46. In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period. True False 47. A quantity discount will lower the reorder point. True False 48. It is critical that the exact quantity calculated in the EOQ model be ordered. True False 49. Safety stock eliminates all stock outs. True False 50. The calculation of safety stock requires knowledge of demand and lead time variability. True False 51. The two basic issues in inventory are how much to order and when to order. True False 52. Cycle counting can be used in motorcycle inventory control. True False 53. Using the EOQ model, the higher an item’s carrying costs, the more frequently it will be ordered. True False 54. The cycle time represents the time between reorder point and receipt of order. True False 55. The cost of placing an order is a function of order size. True False 56. All stock outs must be avoided. True False 57. In the basic EOQ model, annual holding cost is one-half of the total annual cost for all items purchased. True False 58. Quantity discounts are generally given for large number of orders. True False 59. The larger the number of orders placed, the larger the average level of inventory. True False

31. Safety stock is held because we anticipate future demand. True False

 

32. Variability in demand and/or lead time can be compensated for by safety stock.

True False

 

33. Solving quality problems can lead to lower inventory levels.

True False

 

34. ROP models assume that demand during lead time is composed of a series of dependent daily demands.

True False

 

35. Pro?t margins tend to be inversely related to inventory turns.

True False

 

36. In the ?xed-order interval model, the order size is the same for each order.

True False

 

37. The ?xed-order interval model requires a continuous monitoring of inventory levels.

True False

 

38. Discrete stocking levels are used when an organization doesn’t want visibility of inventory levels.

True False

 

39. The ?xed-order interval model requires a larger amount of safety stock than the ROP model for the same risk

of a stockout.

True False

 

40. The single-period model can be very helpful in determining when to order.

True False

 

41. The single-period model can be very helpful in determining how much to order.

True False

 

42. Monitoring inventory turns over time can be used as a measure of performance. True False

 

43. A single-period model would be used mainly by organizations going out of business.

True False

 

44. The basic EOQ model ignores the purchasing cost.

True False

 

45. When the item is offered for resale, shortage costs in the single-period model can include a charge for loss of

customer goodwill.

True False

 

46. In the single-period model, the service level is the probability that demand will not exceed the stocking level in

any period.

True False

 

47. A quantity discount will lower the reorder point.

True False

 

48. It is critical that the exact quantity calculated in the EOQ model be ordered.

True False

 

49. Safety stock eliminates all stock outs.

True False

 

50. The calculation of safety stock requires knowledge of demand and lead time variability.

True False

 

51. The two basic issues in inventory are how much to order and when to order.

True False

 

52. Cycle counting can be used in motorcycle inventory control.

True False

 

53. Using the EOQ model, the higher an item’s carrying costs, the more frequently it will be ordered. True False

 

54. The cycle time represents the time between reorder point and receipt of order.

True False

 

55. The cost of placing an order is a function of order size.

True False

 

56. All stock outs must be avoided.

True False

 

57. In the basic EOQ model, annual holding cost is one-half of the total annual cost for all items purchased.

True False

 

58. Quantity discounts are generally given for large number of orders.

True False

 

59. The larger the number of orders placed, the larger the average level of inventory.

True False

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