8. Which inventory function helps firms garner quantity discounts?

a. lot-size inventory

b. transportation (pipeline) inventory

c. speculative inventory

d. fluctuation inventory

e. anticipation inventory

9. Which of the following statements about the basic EOQ model is NOT TRUE?

a. if annual demand were to double, the EOQ would increase

b. if the ordering cost were to double, the EOQ would either rise or fall

c. if the carrying cost were to increase, the EOQ would fall

d. if annual demand were to double, the number of orders per year would increase

e. if the ordering cost were to double, the EOQ would rise

10. The Valvoline shop orders new tires using the continuous review system. The expected demand is 420 tires per year, and the lead time (the time necessary for the shipment of tires to arrive after it has been ordered) is one week on average. The manager decides to hold safety stock of 20 tires. Find the reorder point, the number of tires in stock when it is time for the car-service center to order the next tire delivery. Assume 52 weeks in each year.

a. 20

b. 30

c. 28

d. 26

11. Dollar store orders merchandise for inventory based on the continuous review system. The service factor (rounded to two decimal places) that Dollar store should use to calculate the safety stock to provide an in-stock rate of 95% is 1.64

a. True

b. False