1. Which is an example of the "inventory ordering cost"? a. Cost of good. b. Shipping and handling cost. c. Cost of renting the storage space. d. Both a and b. e. All of above 2. Inventory performs as a in an operation process to absorb uncertainties in the process. a. profit generator b. money saver c. buffer 3. Smaller order quantities would result in average inventory a. higher b. lower c. no change in 4. Suppose Q* is the best order quantity obtained from the EOQ (economical order quantity) formula. Which would make Q* smaller? a. Increased ordering cost per order. b. Decreased ordering cost per order. c. Decreased annual holding cost per unit. d. None of the above. 5. The total annual inventory cost or total annual cost of inventory (including total holding cost and ordering cost) associated with the optimal order quantity Q* is comparing to any other order quantities. a. the highest b. the lowest c. the average 6. Suppose that daily demand is 25 units, lead time for delivery is 3 days, and safety stock is set as 18 units, then the reorder point ROP is units. a. 25 b. 75 d. 3 f. EOQ c. 93 e. 18