Question
In: Operations Management
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....
1- Inventory costs include all of these: purchase costs,
holding or carrying costs, and ordering costs.
T. True
F. False
2- The Economic Order Quantity (EOQ) model tells
us........
A. how much to order
B. which are higher - holding or ordering costs
C. how to use price discounts
D. when to order
3- When tracking or counting inventory items, we should focus
on which items most?
A. A-items
B. B-items
C. C-items
D. D-tems
4- The Economic Order Quantity (EOQ) model will have the
lowest combination of holding and ordering costs
T. True
F. False
5- Reorder point (ROP) tells us.....
A. how much to order
B. when to order
C. how to use price discounts
D. which vendor location is best
Solutions
Expert Solution
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs.
The above statement is true because if you keep something in your inventory you would have paid for the item which will be your purchase cost, you would have ordered for it which will be ordering cost. to keep your inventory in the warehouse you will incur holding cost which is nothing but building and facility maintenance related costs.
2- The Economic Order Quantity (EOQ) model tells us........
The EOQ tells us "how much to order. " EOQ is the ideal quantity a person should purchase so as to minimize the holding & ordering cost
3- When tracking or counting inventory items, we should focus on which items most?
We should focus on "B Items " which is nothing but the items that has higher Holding or orderingcost because these items should be out of your inventory first so that you do not make any loss with such items
4. The Economic Order Quantity (EOQ) model will have the lowest combination of holding and ordering costs
The above statement is "true" this is explained in the point 1 above,
5- Reorder point (ROP) tells us.....
It tells us "when to order" because ROP can be termed as the trigger point to replenish your inventory.
keosha answered 2 years agoRelated Solutions
1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....
1- Inventory costs include all of these: purchase costs,
holding or carrying costs, and ordering costs.
T. True
F. False
2- The Economic Order Quantity (EOQ) model tells
us........
A. how much to order
B. which are higher - holding or ordering costs
C. how to use price discounts
D. when to order
3- When tracking or counting inventory items, we should focus
on which items most?
A. A-items
B. B-items
C. C-items
D. D-tems
4- The Economic Order Quantity...
7. The costs of carrying inventory include all of the following except: * a- Ordering costs....
7. The costs of carrying inventory include all of the following
except: *
a- Ordering costs.
b- Cost of warehouse space.
c- Insurance and handling costs.
d- Interest on funds tied up in inventory.
e- None of the above.
8. Once the break-even point is reached: *
a- The contribution margin ratio begins to decrease.
b- The variable expenses will remain constant in total.
c- The total contribution margin changes from negative to
positive.
d- The net operating income will...
7. The costs of carrying inventory include all of the following except:
7. The costs of carrying inventory include all of the following except:
a)Ordering costs.
b)Cost of warehouse space.
c)Insurance and handling costs.
d)Interest on funds tied up in inventory.
e)None of the above.
8. Once the break-even point is reached:
a)The contribution margin ratio begins to decrease.
b)The variable expenses will remain constant in total.
c)The total contribution margin changes from negative to positive.
d)The net operating income will increase by the unit contribution margin for each...
Which of the following generates pressure to increase inventories? A) inventory holding costs B) ordering costs...
Which of the following generates pressure to increase
inventories?
A) inventory holding costs
B) ordering costs
C) storage and handling costs
D) taxes and insurance
List and describe the types of carrying costs and ordering costs?
List and describe the types of carrying costs and
ordering costs?
Six categories of costs associated with inventories are purchasing costs, ordering costs, carrying costs, stock out...
Six categories of costs associated with inventories are
purchasing costs, ordering costs, carrying costs, stock out costs,
quality costs, and shrinkage. Assume you are seasoned manager
training new employees about the importance of inventory
management. In 200 words or more, describe at least two of these
inventory costs. Include specific examples in order to effectively
explain these concepts.
An annual demand for an item is 500 units, ordering cost is 8 $, inventory carrying...
An annual demand for an item is 500 units, ordering cost is 8
$, inventory carrying interest is 20% of the purchase price per
year. Purchase prices are as follows as proposed by the
vendor/supplier; where the value of unit cost=10 without any
discount?
Discount 0% 000≤Q<300
Discount 2% 300≤Q<450
Discount 3% 450≤Q
An annual demand for an item is 500 units, ordering cost is 8 $, inventory carrying...
An annual demand for an item is 500 units, ordering cost is 8
$, inventory carrying interest is 20% of the purchase price per
year. Purchase prices are as follows as proposed by the
vendor/supplier; where the value of unit cost=10 without any
discount?
Discount 0% 000≤Q<300
Discount 2% 300≤Q<450
Discount 3% 450≤Q
a) for inventory model with no
discount======================================================================
a1) The economic order quantity = [EOQ] units
a2) The total ordering costs = [TOC] $
a3) The total...
Inventory holding cost are those associated with storing unsold inventory which may include storage costs, labour,...
Inventory holding cost are those associated with storing unsold
inventory which may include storage costs, labour, equipment, and
insurance incurred to manage the unsold goods and risk of loss due
to obsolescence or pilferage. To manage inventory holding costs,
questions on “What”, “Where”, “When”, “How much” and “How often”
are often considered. Explain how these questions help manage
inventory holding costs. You may cite an example to support your
explanation.
A unit of inventory costs a company $40. Annual carrying costs are 1% for interest charges,...
A unit of inventory costs a company $40. Annual carrying costs
are 1% for interest charges, 1% for insurance, 2% allowance for
obsolescence, $2 per unit for building overheads, $1.50 per unit
for damage and loss, and $4 per unit for miscellaneous costs.
Annual demand for the item is constant at 1000 units and each order
costs $100 to place.
Calculate the economic order quantity and the total costs
associated with stocking the item
If the supplier of the item...
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