QUESTION 1

1.The statement that is not true concerning the just-in-time inventory management system is:

The problem of holding inventory is shifted to the supplier.

The aim of the system is to eliminate the need for the business to hold inventory.

The approach is a theoretical one only and has not really been tried in practice.

For the system to work, there must be a close relationship between the business and its supplier.

QUESTION 2

1.Which of the following is not and assumption of the economic order quantity model?

there are no discounts for bulk purchases.

no buffer inventory is required.

demand does not fluctuate seasonally.

the amount of inventory held is constant over the period. .(are we expecting students to know this?)

QUESTION 3

1.Which statement concerning trade credit is true?

One business's trade creditor is the other's trade debtor.

In a period of inflation, it is better to pay off goods bought on credit faster.

In most businesses, an extra charge is made to those who choose to pay on credit.

All of the statements are true.

QUESTION 4

1.Improving cash flow in relation to debtors and accounts payable respectively, requires:

slowing collections and slowing payments.

speeding up collections and speeding up payments.

slowing collections and speeding up payments.

speeding up collections and slowing payments.

QUESTION 5

1.If the principal objective of a firm is to enhance wealth, the most important budget target to meet is:

bank balance.

sales.

profit.

production.