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1. The square root law of cycle stocks . . .
explains the reason for holding cycle stocks.
explains why inventories increase less-than-proportionately with demand.
details the penalties that apply when cycle stocks do not to follow the square root law.
None of the above
2. According to the square root law of cycle stocks, as the throughput volume in a warehouse quadruples (all else equal), its average inventory levels will double.
True
False
3. Distribution requirements planning helps managers to better forecast consumer demand.
4. There are 420 units of a product on hand at the beginning of Week 1. If weekly demand is 80 units, and the replenishment lead time is two weeks, the first order will need to be placed at which of the following points in time?
The beginning of week 4
The beginning of week 2
The beginning of week 3
The beginning of week 5
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