1. For an Economic Order Quantity policy, how would the number of orders per year change if setup cost increased?

a. the number would decrease in proportion to the inverse of the square root of cost

b. the number would decrease in proportion to the square root of cost

c. the number would not change

d. the number would increase in proportion to the cost

e. the number would increase in proportion to the inverse of the square root of cost

f. the number would increase in proportion to the square root of cost

g. the number would decrease in proportion to the cos

2. Which of the following situations may lead to a lower level of safety stock?

a. greater variability in demand

b.desire to maintain higher service level

c. decreased cost of shortages

d. decreased ordering cost

e. all of the above

3. Uncertainty about lead time in a probabilistic inventory model adds to the uncertainty about the demand during lead time.

true or false