ITOM 3306 EXAM 3 QUESTIONS AND
ANSWERS. VERIFIED 2026.
True or false: Many of the items that a firm stocks in inventory are generic regardless of the kind
of business it engages in. - ANS false
Because firms tend to have about 30 percent of current assets invested in inventory, a reduction
in inventories can result in a significant ______.
A. increase in total sales
B. decrease in ROI
C. increase in ROI
D. decrease in total sales - ANS C
Which of the following is NOT a normal function of inventory?
A. To decouple operations.
B. To take advantage of quantity discounts.
C. To hedge against price increases.
D. To meet anticipated demand.
E. To provide an investment vehicle. - ANS E
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Which of the following is NOT a normal function of inventory?
A. To take advantage of existing storage space.
B. To take advantage of quantity discounts.
C. To protect against stock outs.
D. To smooth production requirements.
E. To permit normal operations. - ANS A
he overall objective of inventory management is to achieve satisfactory levels of ______ while
keeping inventory ______ reasonable.
A. customer service; stockout
B. customer service; costs
C. discounts; costs
D. costs; discounts - ANS B
A stock or store of goods is _______.
A. inventory
B. raw materials
C. work-in-process - ANS A
______ inventory systems continuously keep track of changes to the inventory system and a
fixed quantity is ordered when the amount on hand reaches a predetermined level.
A. Perpetual
B. Periodic
C. Personal - ANS A
Which of the following is not a way inventory affects performance measures?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
ANSWERS. VERIFIED 2026.
True or false: Many of the items that a firm stocks in inventory are generic regardless of the kind
of business it engages in. - ANS false
Because firms tend to have about 30 percent of current assets invested in inventory, a reduction
in inventories can result in a significant ______.
A. increase in total sales
B. decrease in ROI
C. increase in ROI
D. decrease in total sales - ANS C
Which of the following is NOT a normal function of inventory?
A. To decouple operations.
B. To take advantage of quantity discounts.
C. To hedge against price increases.
D. To meet anticipated demand.
E. To provide an investment vehicle. - ANS E
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Which of the following is NOT a normal function of inventory?
A. To take advantage of existing storage space.
B. To take advantage of quantity discounts.
C. To protect against stock outs.
D. To smooth production requirements.
E. To permit normal operations. - ANS A
he overall objective of inventory management is to achieve satisfactory levels of ______ while
keeping inventory ______ reasonable.
A. customer service; stockout
B. customer service; costs
C. discounts; costs
D. costs; discounts - ANS B
A stock or store of goods is _______.
A. inventory
B. raw materials
C. work-in-process - ANS A
______ inventory systems continuously keep track of changes to the inventory system and a
fixed quantity is ordered when the amount on hand reaches a predetermined level.
A. Perpetual
B. Periodic
C. Personal - ANS A
Which of the following is not a way inventory affects performance measures?
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
