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13) A certain type of computer costs $1,000, and the annual holding cost is 25%. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?
C) 110
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If the actual order quantity is the same as the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand
C) is one-half of the economic order quantity
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9) Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size. One variable, the costs associated with holding inventory, is referred to as 9) Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size. One variable, the costs associated with holding inventory, is referred to as
B) carrying costs.
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The economic order quantity deals with calculating the proper order size with respect to ___ costs and ____ costs.
carrying; ordering
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The Economic Order Quantity
Assumes that delivery times of each order are consistent.
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Economic order quantity EOQ
the order size that minimizes annual cost answers the the question how much to order
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Economic Order Quantity (EOQ) includes several variables that must be taken into consideration when calculating the optimal order size. One variable, the costs associated with holding inventory, is referred to as A) ordering costs. B) carrying costs. C) the reorder point. D) stockout costs.
Answer: B
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The need to place an order for inventory is specified by the A) company inventory policies. B) economic order quantity. C) stockout point. D) reorder point.
Answer: D
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Two fundamental inventory decisions are when to order and how much to order. Which of the following statement is true with respect to Fixed Quantity (FQS) and Fixed Period (FPS) inventory systems? a. A FPS orders a fixed period quantity when the inventory position reaches or drops below the reorder point (r). b. A FPS must cover a time period of T + L to cover the risk of a stock out. c. A FPS places an order for the economic order quantity every T time units. d. A FQS places an order to replenish the inventory position up to a target level (M) when the inventory position reaches the reorder point (r).
The traditional approach to inventory management to ensure sufficient quantity on hand to maintain production is known as A) safety stock. B) just-in-time production. C) economic order quantity. D) optimal inventory quantity.
Answer: C
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