9

One day Liliana was eating a sandwich at (M&M). She really liked the mustard that they use in the sandwich. Medro told her that the supplier they buy the mustard from delivers the mustard order sometimes, within 2 days, 4 days, 1 day, or even a week. He cannot guarantee a fixed delivery time every time. Because of this, we really dont know how much to order. Their friend said: dont worry guys, just use the basic EOQ model, it is the solution to your problem.

a. Liliana gave them good advice

b. Liliana did not give them good advice

18

Medro & Mariana were going over their operations management course notes from GUST. They were looking at inventory management. Mariana told Medro: you know Medro, at the economic order quantity, the total annual inventory cost equals double the annual holding cost.

a. Mariana knows what she is saying

b. Mariana does not know what she is taking about

27

Mariana also told Medro: in an ABC inventory system, A-items typically represent a small portion of all items in inventory.

a. Mariana knows what she is talking about

b. Mariana does not know what she is taking about