Q1. Using the order point system, when must an order be placed?

-Why is safety stock carried? -What is the formulafor the order point?

-On what two things does the order point depend?

-Why is the demand during the lead time important?

Q2. What are the four factors that can influence the amount of safety stock that should be carried? How does the length of the lead time affect the safety stock carried?

Q3. What is the standard deviation of demand during the lead time? If the standard deviation for the lead-time interval is 100 units, what percentage of the time would the actual demand be equal To + 100 units? To +200 units? To +300 units?

Q4. What are the three categories of stockoutcosts? What do these costs depend upon in any company?

Q5. If the lead time increases from 1 to 4 weeks, will the standard deviation of demand during the lead time increase four times? If not, why?

Q6. What kinds of information are shown on a perpetual inventory record?

Q7. Define the target level used in the periodic review system.

Q8. What are the objectives of distribution inventory management?

Q9. Describe and compare the pull and push systems of inventory management.