Please answer each question with the number it associates with and with 70 words or more:

1. Distinguish between in-process inventory, safety stock inventory, and seasonal inventory?

2. Discuss the nature of the costs that affect inventory size. For example (a) How does shrinkage (stolen stock) contribute to the cost of carrying inventory? How can this cost be reduced?; (b) How does obsolescence contribute to the cost of carrying inventory? How can this cost be reduced?

3. Which type of inventory system would you use in the following situations? (a) Supplying your kitchen with fresh food; (b) Obtaining a daily newspaper; (c) Buying gas for your car?