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QUESTION 106

- (Topic 3)
A key assumption of the economic order quantity (EOQ) is that:

  1. A. future demand cannot be projected.
  2. B. the rate of demand is continuous and constant.
  3. C. reorder frequency is fixed.
  4. D. as the lot size decreases, the setup cost per unit decreases.

Correct Answer: B

QUESTION 107

- (Topic 3)
Which of the following variables is the most appropriate customer-facing goal used to determine the target inventory level?

  1. A. Inventory turns
  2. B. Level of service
  3. C. Total delivery cost
  4. D. Delivery lead time

Correct Answer: B

QUESTION 108

- (Topic 2)
The transportation manager at a consumer goods manufacturer has decided to begin shipping full truckload rather than less-than-truckload quantities. Which of the following
outcomes is likely following implementation of this decision?

  1. A. Inventory levels at the manufacturer will decrease.
  2. B. Lead times as seen by the customer will increase.
  3. C. Production efficiencies at the manufacturer will increase.
  4. D. Transportation costs as seen by the customer will increase.

Correct Answer: B

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