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1) Inventory is any stored resource that is used to satisfy a current or future need.
True or False
2) The purpose of inventory control is to regulate the flow of inventory at the various inventory storage locations within the organization. This can be done by determining how much inventory is to be ordered and when the inventory should be ordered.
TRUE OR FALSE
3) Under what circumstances can inventory be used as a hedge against inflation? Select one for the correct answer.
A) Purchasing inventory at today's prices
B) Careful consideration should be given to carrying costs
4) Storing large quantities of inventory can NOT eliminate shortages and stockouts.
5) There are a number of assumptions that are made in using the basic Economic Order Quantity, EOQ. All of them are listed but one does not belong here. Which one is it?
1. the cost of ordering,
2. the cost of holding inventory,
3. annual demand
4. order time
5. Stockouts
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