1. Select the description which most closely fits the term ORDER POINT: a) the time it takes to replenish an item in inventory. b) extra inventory of an item carried to protect against variations in demand during lead time c) a listing of components required to manufacture a product d) the time when an order should be placed e) none of the above 2. If the standard deviation of demand is 100 units and the average demand is 1000 units, then we can be 95% confident that actual sales will be 1000 units plus or minus about: a) 100 units b) 150 units c) 200 units d) 300 units e) 400 units 3. Which of the following is the best statement? a) stockouts do not cost money because customers are willing to wait the cost of a stockout will vary depending on the market served, the customer, and competition b) stockouts can occur at any time in the inventory cycle c) stockouts do not depend on the frequency of reorder d) all the above statements are true 4. Which of the following is correct? a) order quantities are fixed in the periodic review system b) the two-bin system is an example of the order point system c) the safety stock does not depend upon the frequency of reorder d) all of the above are true e) none of the above is true 5. The distribution inventory management system which forecasts when the various demands will be made by the system on central supply is called: a) pull system b) push system c) distribution requirements planning d) inventory replenishment e) order point system