Inventory Management MCQ Quiz - Multiple Choice Questions & Answers

1. Which of the following is true for Inventory control?

1. Economic order quantity has minimum total cost per order
2. Inventory carrying costs increases with quantity per order
3. Ordering cost decreases with lo size
4. All of the above

2. Which of the following is true for Inventory control?

1. Economic order quantity has minimum total cost per order
2. Inventory carrying costs increases with quantity per order
3. Ordering cost decreases with lo size
4. All of the above

3. Which product is usually bought on a fixed interval basis?

1. textbooks
2. wedding gifts
3. sugar
4. brownies

4. Which product is usually bought on an ROP basis?

1. textbooks
2. wedding gifts
3. sugar
4. newspaper

5. A fixed-interval ordering system would be used for items that have independent demand.

1. true.
2. false.

6. A store that sells daily newspapers could use the single-period model for reordering.

1. true.
2. false.

7. A two-bin system is essentially a simple reorder point system.

1. true.
2. false.

8. Average stock level can be calculated as

1. Minimum stock level + ½ of Re-order level
2. Maximum stock level + ½ of Re-order level
3. Minimum stock level + 1/3 of Re-order level
4. Maximum stock level + 1/3 of Re-order level

9. Holding and ordering costs are inversely related to each other.

1. true.
2. false.

10. If a decrease in unit price causes the average demand rate to increase, which one of these would not increase?

1. the EOQ
2. lead time
3. annual holding cost
4. the ROP