10 Questions
What is the meaning of inventory?
A usable but idle resource
What is the role of selective inventory management?
To prioritize and manage inventory for specific items
What is the exchange curve concept used for in aggregate inventory planning?
To establish the trade-off between ordering and holding costs
What is the function of safety stocks in inventory management?
To minimize the risk of stockouts due to uncertain demand
What is the inventory turnover ratio a measure of?
Business performance
What is the purpose of performing sensitivity analysis on a type of inventory model?
To determine the impact of uncertainty on inventory decisions
What is expressed as a fraction of the value of the goods stocked per year?
Cost of carrying inventory
Which term refers to the opportunity cost of blocking material in a non-productive form as inventories?
Cost of carrying inventory
What does the cost of incurring shortages represent?
Opportunity cost of not having an item in stock when one is demanded
What is the inventory management concerned with?
Both a and b
Test your understanding of inventory meaning, cost parameters, types of inventory policies, selective inventory management, exchange curve concept, mathematical models, sensitivity analysis, and safety stocks computation.
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