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WORKING CAPITAL MANAGEMENT
FIN3702
ASSIGNMENT 02 S2 2020
ASSIGNMENT 02 (compulsory)
20 MULTIPLE-CHOICE QUESTIONS (20 marks)
DUE DATE: 09 October 2020
UNIQUE NUMBER: 794574
AIM: The purpose of this assignment is to evaluate your knowledge of the fundamental
aspects of cash flow management, financial planning, working capital management and
the management of current assets and/or liabilities. To complete this assignment, you
must study chapters 3, 14 and 15 of your prescribed book and the relevant study units in
your study guide.
Answer the following questions and submit your assignment at https://my.unisa.ac.za.
QUESTION 1
The philosophy of the … is that the firm would have only work-in-progress inventory.
1. red-line system
2. just-in-time system
3. materials requirement planning system
4. basic economic order quantity system
Option 2 correct
▪ The JIT system is an inventory management technique that minimizes inventory investment by
having materials inputs arrive at exactly the time they are needed for production.
▪ The JIT uses no, or very little, safety stock.
QUESTION 2
In the EOQ model, if the carrying costs increase while all other costs remain unchanged, the number of
orders placed would …
1. increase.
2. decrease.
3. remain unchanged.
4. change without regard to carrying costs.
