True or False--Indicate "true" or "false" for each of the following statements and explain why.

(1) If the lead time of delivery is known with certainty, no safety stock would be needed.

(2) An increase in annual demand would increase the reorder point proportionally.

(3) A decline in selling price with all other items (including carrying costs) remaining constant would not affect the EOQ if stockouts are permitted.

(4) A reduction in the prime interest rate has no effect on economic order quantity.

(5) The safety stock is equal to the expected demand during lead time.

(6) Perfect inventory control is to keep detailed records on each item carried in inventory and bring the records up to date.

(7) The larger the quantity ordered, the higher the total inventory cost.

(8) A decline in the investment in inventory is an indicator of good inventory management.