Scribd
Upload
42 views2 pages

Rue/False: Days B. 60 Days C. 10 Days D. 57 Days

This document contains a true/false quiz about inventory management concepts. It covers topics like different types of inventory costs, factors that influence inventory levels, and the purpose of safety stock. The key points are: - An airline seat is an example of an asset held for future use, so it is classified as inventory. - Marketing and operations prefer higher inventory levels to ensure availability, while finance prefers lower inventory to reduce holding costs. - Safety stock is additional inventory kept above average needs to protect against fluctuations in demand. - Setup costs depend on the number of items produced, not the number in inventory.

Uploaded by

Elaine Yap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
42 views2 pages

Rue/False: Days B. 60 Days C. 10 Days D. 57 Days

This document contains a true/false quiz about inventory management concepts. It covers topics like different types of inventory costs, factors that influence inventory levels, and the purpose of safety stock. The key points are: - An airline seat is an example of an asset held for future use, so it is classified as inventory. - Marketing and operations prefer higher inventory levels to ensure availability, while finance prefers lower inventory to reduce holding costs. - Safety stock is additional inventory kept above average needs to protect against fluctuations in demand. - Setup costs depend on the number of items produced, not the number in inventory.

Uploaded by

Elaine Yap
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

RUE/FALSE

1. An airline seat is an example of an asset held for future use or sale.

ANS: T PTS: 1

ANS: F PTS: 1

5. Marketing an operations generally prefer high inventory levels while finance would prefer
small inventories.

ANS: T PTS: 1

6. Work in process inventory is completed products ready for distribution or sale to customers.

ANS: F PTS: 1

7. Safety stock inventory is an additional amount of inventory kept over and above the average
amount required to meet demand.

ANS: T PTS: 1 as

8. Setup costs depend on the number of items manufactured.

ANS: F PTS: 1

9. Inventory holding costs can be accurately measured by accounting departments.

ANS: F PTS: 1

10. Costs associated with maintaining storage facilities such as gas and electricity, taxes, and
insurance are associated with fixed ordering costs.

ANS: F PTS: 1

11. Larger orders result in higher total holding cost but lower total ordering cost.

ANS: T PTS: 1

days
B. 60 days
C. 10 days
D. 57 days
15. Which of the following trade credit terms is not valid?
A. 3/10, net 50
B. 8/10 EOM, net 60
C. 2/10, net 30
D. All of the above are valid credit terms

16. Supposing you purchase goods on terms of 1/10, net 30. Taking compounding into
account, what annual rate of interest is implied by the cash discount? (Assume a year
has 365
days.)
A. 9.6%
B. 9.2%
C. 20.1%
D. 44.6%

17. Suppose you purchase goods on terms of 3/10, net 60. Taking compounding into
account,
what annual rate of interest is implied by the cash discount? (Assume a year has 365
days.)
A. 32%
B. 5%
C. 91%
D. 28.2%

18. Suppose you purchase goods on terms of 2/10, net 50. Taking compounding into
account,
what annual rate of interest is implied by the cash discount? (Assume a year has 365
days.)

You might also like