Inventory Management MCQ Questions and Answers Quiz

21. The economic order quantity cannot be used when holding costs are a percentage of purchase cost.

  1. true.
  2. false.

22. The following classes of costs are usually involved in inventory decisions except

  1. Cost of ordering
  2. Carrying cost
  3. Cost of shortages
  4. Machining cost

23. The following classes of costs are usually involved in inventory decisions except

  1. Cost of ordering
  2. Carrying cost
  3. Cost of shortages
  4. Machining cost

24. The minimum stock level is calculated as

  1. Reorder level - (Nornal consumption x Normal delivery time)
  2. Reorder level + (Nornal consumption x Normal delivery time)
  3. (Reorder level + Nornal consumption) x Normal delivery time
  4. (Reorder level + Nornal consumption) / Normal delivery time

25. The minimum stock level is calculated as

  1. Reorder level – (Nornal consumption x Normal delivery time)
  2. Reorder level + (Nornal consumption x Normal delivery time)
  3. (Reorder level + Nornal consumption) x Normal delivery time
  4. (Reorder level + Nornal consumption) / Normal delivery time

26. The objective of inventory management is to minimize holding costs.

  1. true.
  2. false.

27. The order cost per order of an inventory is Rs. 400 with an annual carrying cost of Rs. 10 per unit. The Economic Order Quantity (EOQ) for an annual demand of 2000 units is

  1. 400
  2. 440
  3. 480
  4. 500

28. The time period between placing an order its receipt in stock is known as

  1. Lead time
  2. Carrying time
  3. Shortage time
  4. Over time

29. The two basic questions in inventory management are how much to order and when to order.

  1. true.
  2. false.

30. Use of the fixed-interval model requires having a perpetual inventory system.

  1. true.
  2. false.
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MCQ Multiple Choice Questions and Answers on Inventory Management

Inventory Management Question and Answer