16. The Farmingham Company faces very uncertain demand. A simple way of altering its EOQ-based inventory system to account for the uncertainty is to add safety stock increase the size of every order slow production whenever sales trends change stock only finished goods inventories 17. An automobile manufacturer has just decided to outsource windshields instead of making them itself. Using an outside supplier under the just-in-time approach will have what immediate effect on the manufacturer's inventory management? reduce finished goods inventories reduce raw material inventories reduce work in process inventories both a and b both b and c 18. A larger inventory order quantity _____________ ordering costs but _____________ holding costs, assuming both are measured over a specific period of time. increases, decreases has no effect on, increases has not effect on, decreases decreases, increases 19. A credit policy includes each of the following except: credit standards the company's approach to credit investigation and corrections whether a "just in time" system will be used credit terms 20. The major motives for trade credit extension include all of the following except: pricing motive operating motive contracting cost motive production motive