11. Which of the following statements about lot-sizing rules for MRP is true? a) The periodic order quantity (POQ) rule generates a higher level of average inventory, since it creates inventory remnants. b) FOQ is a dynamic lot-sizing rule which reduces the amount of inventory, by doing a better job of matching the order quantity to the projected on-hand inventory quantity. c) The lot for lot rule minimizes inventory investment but maximizes the number of orders placed. d) In general, static lot sizing rules introduce greater instability into the production process. 12. Which one of the following is the most likely example of dependent demand for an MRPcontrolled item? a) Demand for spare parts. b) Demand directly from customers. c) Demand from quality control department for destructive testing. d) Demand from MPS. 13. The underlying logic for level-by-level processing in an MRP system is: a) Each item in a bill of materials must be processed from the bottom up. b) Items without safety stock quantities must be processed before items that have safetystocks greater than zero. a) Items must be processed in order of increasing lead time. b) All parents of an item must be processed before that item is processed.

11. Which of the following statements about lot-sizing rules for MRP is true? a) The periodic order quantity (POQ) rule generates a higher level of average inventory, since it creates inventory remnants. b) FOQ is a dynamic lot-sizing rule which reduces the amount of inventory, by doing a better job of matching the order quantity to the projected on-hand inventory quantity. c) The lot for lot rule minimizes inventory investment but maximizes the number of orders placed. d) In general, static lot sizing rules introduce greater instability into the production process. 12. Which one of the following is the most likely example of dependent demand for an MRPcontrolled item? a) Demand for spare parts. b) Demand directly from customers. c) Demand from quality control department for destructive testing. d) Demand from MPS. 13. The underlying logic for level-by-level processing in an MRP system is: a) Each item in a bill of materials must be processed from the bottom up. b) Items without safety stock quantities must be processed before items that have safetystocks greater than zero. a) Items must be processed in order of increasing lead time. b) All parents of an item must be processed before that item is processed.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 7Q

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Which of the following is an advantage of the periodic inventory system? A. frequent physical inventory counts B. cost prohibitive C. time consuming D. real-time information for managers
Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.
Explain why, in the traditional view of inventory, carrying costs increase as ordering costs decrease.
A JIT inventory management system maintains which of the following? a. Goods should be pushed through the system on a fixed schedule based on anticipated demand. b. Goods should be pulled through the system by present demand. c. Total inventory costs are minimized by balancing setup and carrying costs. d. Inventories are needed to avoid stock-out costs.
Which of the following statements is correct? Group of answer choices A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory. B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet. C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet. D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.
Are you correct that, by using LIFO, Kroger reports lower inventory and lowerprofits? Why would Kroger do that?
Identify that if prices are rising, which inventory cost flow method will produce the highest amount of ending inventory? A. Weighted average B. LIFO C. FIFO S. LIFO, FIFO, and weighted average will all produce the same amount of cost of goods sold.
In one modification of the Pigskin problem, the maxi-mum storage constraint and the holding cost are based on the average inventory (not ending inventory) for agiven month, where the average inventory is defined as the sum of beginning inventory and ending inven-tory, divided by 2, and beginning inventory is before production or demand. Modify the Pigskin model withthis new assumption, and use Solver to find the optimal solution. How does this change the optimal productionschedule? How does it change the optimal total cost?
Which of the following statement is not valid as it applies to inventory costing method? A) If inventory quanities are to be maintained, part of the earning must be invested (plowed back) in inventories when FIFO is used during a period of rising prices. B) LIFO tends to smooth ou the net income patterns by matching currents cost of goods sold with current revenue, when inventories remain at costant quantities. C) When a firm using the LIFO method fails to maintain its usual inventory position (reduces stock on hand below customary levels), there may be a matching of old cost with current revenue. D) The use of FIFO permits some control by managment over the amount of net income for a period through controlled purchase, which is not true with LIFO.
22.Which inventory costing method has a stabilizing effect on profit, such that during a period of rising prices its use produces a not so high cost of goods sold and not so low profit as the earlier lower costs tend to stabilize the effect of increasing prices on both cost of goods sold and ending inventory? a. First-in, first-out method b. Last-in, first-out method c. Specific identification method d. Average method
Which cost flow assumption generally results in the highest reported amount for ending inventory when inventory costs are rising? Explain.
For all short exercises, assume the perpetual inventory system is used unless stated otherwise. Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements Which inventory costing method would best meet Ward’s goal? Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?