33:799:301 Study Guide - Inventory Control, Distribution Center, Materials Management
3 Nov 2013
School
Department
Course
Professor
Document Summary
True/false: the four broad categories of inventories are raw materials, work-in-process, subassemblies, and finished goods. Pts: 1: the abc inventory control system categorizes inventory items into three groups, a, b, and c. a items are given highest priority, while c items have the lowest priority. Prioritization may be based on annual dollar usage, shelf life, or sales volume. Pts: 1: the eoq, also known as the economic order quantity, is the optimal order size in terms of cost because it minimizes the annual total inventory cost. The eoq is the lot size where inventory holding costs equal annual ordering costs. Pts: 1: the total annual inventory cost is the sum of the annual purchase cost, the annual holding cost, the annual capacity cost, and the annual ordering cost. Pts: 1: service parts sold to the repair shops are examples of dependent demand. Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period.
