Business

7407 Words Feb 26th, 2013 30 Pages
Introduction to Management Science, 10e (Taylor)
Chapter 16 Inventory Management

1) Independent demand items are used internally to produce a final product.
Answer: FALSE
Diff: 2 Page Ref: 744
Main Heading: Elements of Inventory Management
Key words: dependent demand items

2) Dependent demand items are final products demanded by an external customer.
Answer: FALSE
Diff: 2 Page Ref: 744
Main Heading: Elements of Inventory Management
Key words: independent demand items

3) Inventory costs include carrying, ordering, and shortage costs.
Answer: TRUE
Diff: 1 Page Ref: 744
Main Heading: Elements of Inventory Management
Key words: inventory costs

4) The purpose of inventory management is to determine how much
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Answer: TRUE
Diff: 2 Page Ref: 746
Main Heading: Economic Order Quantity Models
Key words: inventory costs

21) Shortage costs include loss of customer goodwill.
Answer: TRUE
Diff: 2 Page Ref: 746
Main Heading: Economic Order Quantity Models
Key words: inventory costs

22) If a business frequently runs out of inventory their service levels are negative.
Answer: FALSE
Diff: 2 Page Ref: 768
Main Heading: Economic Order Quantity Models
Key words: service level

23) __________ demand items are generally final products demanded by customers.
Answer: independent
Diff: 2 Page Ref: 744
Main Heading: Economic Order Quantity Models
Key words: independent demand items

24) The purpose of inventory management is to determine __________ and __________ to order.
Answer: how much/when
Diff: 2 Page Ref: 746
Main Heading: Economic Order Quantity Models
Key words: inventory management

25) __________ demand items are used internally to produce a final product.
Answer: dependent
Diff: 2 Page Ref: 744
Main Heading: Economic Order Quantity Models
Key words: independent demand items

26) Inventory __________ costs include storage cost and the cost of capital.
Answer: carrying
Diff: 2 Page Ref: 744
Main Heading: Economic Order Quantity Models
Key words:

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