MAN 4504 - CHAPTER 12 EXAM QUESTIONS WITH VERIFIED
SOLUTIONS LATEST UPDATE 2026
Which of the following statements about inventory costs is/are true - Answers
Holding costs can include the cost of insurance;
Ordering and setup costs are treated the same.
Which of the following statements is not a way inventory affects performance
measures? - Answers Dividends
One of the reasons a firm carries inventory is to ______, that is, to achieve constant
output and use inventory to meet overly high requirements during seasonal periods. -
Answers Smooth production requirements
The ______ approach classifies inventory items according to a measure of
importance, such as annual dollar value. - Answers A-B-C
Which of the following statements about inventory management is/are true - Answers
One of the goals is to achieve good customer service
Inventory managers must decide how much to order
One of the goals is to keep inventory costs within reasonable bounds
______ 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. - Answers Perpetual
Which of the following is/are the basic issue/s of inventory management? - Answers
How much to order
When to order
Which is the definition of holding cost in the EOQ model? - Answers The cost to
carry a single unit in inventory for a length of time.
Because firms tend to have about 30 percent of current assets invested in inventory, a
reduction in inventories can result in a significant ______. - Answers Increase in ROI
Which of the following statements about the A-B-C approach is/are true? - Answers
Approximately 10 to 20% of items account for about 60 to 70% of the annual dollar
value.
SOLUTIONS LATEST UPDATE 2026
Which of the following statements about inventory costs is/are true - Answers
Holding costs can include the cost of insurance;
Ordering and setup costs are treated the same.
Which of the following statements is not a way inventory affects performance
measures? - Answers Dividends
One of the reasons a firm carries inventory is to ______, that is, to achieve constant
output and use inventory to meet overly high requirements during seasonal periods. -
Answers Smooth production requirements
The ______ approach classifies inventory items according to a measure of
importance, such as annual dollar value. - Answers A-B-C
Which of the following statements about inventory management is/are true - Answers
One of the goals is to achieve good customer service
Inventory managers must decide how much to order
One of the goals is to keep inventory costs within reasonable bounds
______ 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. - Answers Perpetual
Which of the following is/are the basic issue/s of inventory management? - Answers
How much to order
When to order
Which is the definition of holding cost in the EOQ model? - Answers The cost to
carry a single unit in inventory for a length of time.
Because firms tend to have about 30 percent of current assets invested in inventory, a
reduction in inventories can result in a significant ______. - Answers Increase in ROI
Which of the following statements about the A-B-C approach is/are true? - Answers
Approximately 10 to 20% of items account for about 60 to 70% of the annual dollar
value.
