Which of the following is NOT anassumption of the continuous review model in inventory control?

A.

Demand is uncertain.

B.

An order is placed whenever the inventory position drops to thereorder point.

C.

It takes time to receive an order.

D. An order is placed when there is zero inventory in thesystem.

Suppose a supplier offers an incremental quantity discount for aproduct. The supplier charges $10 per unit for the first 1,000units in an order, $8 per unit for the next 1,000 units, and $7 perunit for any additional units in the order. What is the averagecost per unit of an order of 4,000 units? Find the closestvalue.

A.

$7.50

B.

$9.00

C.

$8.00

D. $8.67

Which of the following statements about the basic EOQ modelis INCORRECT?

	A.	The number of orders to place in a year decreases as theper-unit inventory holding cost increases.
	B.	The EOQ decreases as the inventory holding cost increases.
	C.	The EOQ increases as the setup cost increases.
	D.	The EOQ increases as the annual demand increases.