The main components of inventory holding costs

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Reference no: EM132243055

1. The main components of inventory holding costs are

physical and financial carrying costs.

storage and stockout costs.

warehousing and housekeeping costs.

order and backorder costs.

2. Which of the following would occur if a firm chose not to hold inventory for a given product?

Holding costs would increase.

Stockout costs would increase.

Order placement costs would increase.

None of the above

3. In the context of the EOQ model, the term “sawtooth” refers to which of the following?

The pattern of inventory consumption and replenishment over time

The particular item that can be managed using the EOQ approach

How aggressively managers are able to cut inventory levels

The basic tool used to build storage facilities

4. What is the economic order quantity if annual demand is 100 units, the order placement cost is $25, and the holding cost per unit per year is $50?

10 units

50 units

100 units

200 units

None of the above

Reference no: EM132243055

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