1. The vendor managed inventory system is an effective strategy mainly because: O It allows to keep optimal levels of inventory to guarantee a high service level O It increases service levels while at the same time reduces inventory levels O It transfers ownership of inventory to suppliers It allows good communication between suppliers and retailers

2. The inventory turnover ratio measures O How often inventory turns with respect to total assets O How quickly inventory is replenished O How often inventory turns with respect to total sales O How much inventory is carried out with respect to total working capital

3. Holding inventories allows companies to reduce marginal costs in manufacturing becau O It helps companies to cope with the mismatch between supply and demand O It can guarantee a high service level O It exploits economies of scale by facilitating production in large batches O It can facilitate efficient transportation operations

4. One way to reduce the dependency of holding high levels of inventory for different parts/products is: O Consolidate transportation operations across multiple suppliers/buyers O Increase safety stocks to guarantee a high service level Decrease the turnover ratio O Implement a Vendor Managed Inventory program

5. The cross-dock strategy is most effective for: O High demand items with low value O High demand items with high value O Bulky items of high value O Low demand items of high value