1 Goods/materials that are in some state of readiness to fulfill demand requirements and are held for sale in future are called as Inventories.

True

False

2 Acme Inc., has decided to achieve four inventory turnovers during FY2018. Based on this, calculate how many months' worth of inventory Acme Inc. should hold.

0.25

1

3

None of the above

3 When we order inventories in large batches, the ordering costs will be _____, but inventory holding cost will be _____.

Low, low

Low, high

High, low

High, high

On-hand inventory and Inventory position are exactly the same, when_____. (Fill in the blank)

On-hand inventory is greater than zero

On-hand inventory becomes zero

There are no other orders still waiting to be delivered

None of the above

Question8

When demand is uncertain, the reorder point is equal to _____. (Fill in the blank)

Safety stock

Sum of safety stock and average demand during lead time

Average demand during lead time

None of the above

Question9

If tolerance for stock outs for Acme Inc. is 1%, then its service level will be _____. (Fill in the blank)

1%

99%

Insufficient information

None of the above