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Questions and Answers
What is the primary purpose of maintaining inventory levels according to the passage?
What is the primary purpose of maintaining inventory levels according to the passage?
- To improve customer service by minimizing stockouts (correct)
- To reduce the cost of placing orders and transportation
- To maximize profits by reducing costs
- To increase operating efficiency by decoupling operations
Which of the following is NOT a benefit of carrying inventory mentioned in the passage?
Which of the following is NOT a benefit of carrying inventory mentioned in the passage?
- Allowing longer production runs and reducing the number of setups
- Enabling manufacturing to purchase in larger quantities
- Reducing the cost of changing production levels (correct)
- Decoupling one operation from another and allowing more efficient operations
According to the passage, which of the following is a disadvantage of reducing inventory levels?
According to the passage, which of the following is a disadvantage of reducing inventory levels?
- Higher annual cost of ordering
- Increased likelihood of stockouts and lost customers (correct)
- Decreased operating efficiency
- Increased transportation and material handling costs
What is the purpose of the ABC inventory classification system mentioned in the passage?
What is the purpose of the ABC inventory classification system mentioned in the passage?
Which of the following is NOT mentioned in the passage as a factor that influences inventory management?
Which of the following is NOT mentioned in the passage as a factor that influences inventory management?
According to the passage, how does carrying inventory help improve operating efficiency?
According to the passage, how does carrying inventory help improve operating efficiency?
What is the relationship between inventory levels and the cost of placing orders according to the passage?
What is the relationship between inventory levels and the cost of placing orders according to the passage?
According to the passage, which of the following is a benefit of carrying higher levels of inventory?
According to the passage, which of the following is a benefit of carrying higher levels of inventory?
How does the ABC inventory classification system mentioned in the passage help with inventory management?
How does the ABC inventory classification system mentioned in the passage help with inventory management?
Which of the following is NOT mentioned in the passage as a factor that influences the cost of transportation and handling?
Which of the following is NOT mentioned in the passage as a factor that influences the cost of transportation and handling?
