Economic order quantity (EOQ) is best applied when the:

Aproduct is make-to-order.

Bproduct shelf life is short.

Cproduction process is continuous.

Dconsumption rate is uniform.

Answer : D

Which of the following actions most likely will serve to reduce economic lot size?

ADecreasing the number of items

BDecreasing the unit cost of items

CIncreasing the cost of ordering items

DIncreasing the cost of carrying inventory

Answer : D

Consolidating shipments and reducing the frequency of pickups help to reduce which of the following types of costs?

AWarehousing and inspection

BImport duties and processing

CTotal transportation

DCapital

Answer : C

Which of the following outcomes is a benefit of using a purchase requisition?

APurchase pricing being correct

BImproved accuracy of information

CAssurance that delivery dates are met

DTerms and conditions being followed

Answer : B

Vendor-managed inventory is most appropriate for which of the following types of products?

ACritical components with high value

BStandard design products with low value

CLong lead-time components with medium value

DComplex design products with low value

Answer : B

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