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Question 2.How many statements are true?(A) 0(B) 1(C) 2(D) 3(E) 4

Statement 1. If the lot size is greater than the economic order quantity, then the total annual ordering cost is greater than the total annual carrying cost for zero safety stock.

Statement 2. If the lot size increases, then the inventory period decreases.

Statement 3. If the order frequency increases, then the lot size increases.

Statement 4. If the safety stock increases, then the reorder point decreases.

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Part 3.Questions 7-9.

Question 7.Consider the relationships Q=D*T and T=1/F.Constant demand is 1560 items/year.

How many statements are true?(A) 0(B) 1(C) 2(D) 3(E) 4

Statement 1.If the inventory period is 5 weeks, then the lot size is 90.

Statement 2.If the order frequency is 1.3/quarter, then the lot size is 90.

Statement 3.If the inventory period is 5 weeks, then the order frequency is 10.4/year.

Statement 4.If the order frequency is 2.6/quarter, then the inventory period is 5 weeks.

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Question 8.Consider the relationship ROP=D*LT+SS.Constant demand is 1560 items/year.

How many statements are true?(A) 0(B) 1(C) 2(D) 3(E) 4

Statement 1.If the lead time is 1.5 weeks and the safety stock is 8, then the reorder point is 53.

Statement 2.If the reorder point is 53 and the lead time is 1.2 weeks, then the safety stock is 8.

Statement 3.If the safety stock is 3 and the reorder point is 53, then the lead time is 1.5 weeks.

Statement 4.The reorder point is equal to the demand times lead time plus safety stock.

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Question 9.Consider the relationship EOQ=sqrt(2*D*Co/Cc).Constant demand is 1560 items/year.How many statements are true?(A) 0(B) 1(C) 2(D) 3(E) 4

Statement 1.If the unit carrying cost is $4/item/quarter and the unit ordering cost is $32/order, then the economic order quantity is 316.

Statement 2.At EOQ with zero safety stock, if the unit carrying cost is $4/item/quarter and the unit ordering cost is $32/order, then the total annual carrying cost is $158.

Statement 3.At EOQ with zero safety stock, if the economic order quantity is 79 and the total quarterly ordering cost is $158, then the unit carrying cost is $4/item/year.

Statement 4.If the unit ordering cost is twice the unit carrying cost per item per year, then the economic order quantity is 79.

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