APSC 211 Test Bank PDF

Test Bank for (APSC 211) 1. What does inventory encompass? a) Only finished goods b) Only raw materials c) Raw materials, work-in-process, finished goods, and stores & spares d) Only work-in-process 2. Which of the following is considered part of inventory?...

Test Bank for (APSC 211) 1. What does inventory encompass? a) Only finished goods b) Only raw materials c) Raw materials, work-in-process, finished goods, and stores & spares d) Only work-in-process 2. Which of the following is considered part of inventory? a) Only finished goods b) Only raw materials c) Only stores & spares d) Raw materials, work-in-process, finished goods, and stores & spares 3. What is included in the definition of inventory? a) Only raw materials b) Only finished goods c) Raw materials, work-in-process, finished goods, and stores & spares d) Only work-in-process 4. Which items are encompassed by inventory? a) Only stores & spares b) Only work-in-process c) Raw materials, work-in-process, finished goods, and stores & spares d) Only finished goods 5. What is the primary purpose of Inventory Control? a) To increase inventory levels b) To measure inventory only c) To regulate inventory according to predetermined norms d) To ignore economic lot size for order or production 6. What norms are typically considered in Inventory Control? a) Safety stock and maximum level only b) Minimum level and order level only c) Economic lot size for order or production only d) Economic lot size for order or production, safety stock, minimum level, maximum level, order level, etc. 7. What does Inventory Control involve? a) Random regulation of inventory levels b) Measuring inventory occasionally c) Regulating inventory based on predetermined norms d) Completely ignoring safety stock 8. Which of the following is NOT considered in Inventory Control? a) Safety stock b) Maximum level c) Random regulation of inventory d) Minimum level 9. What is the primary focus of inventory control? a) Increasing inventory costs  Test Bank for (APSC 211) b) Reducing inventory costs c) Maintaining inventory costs at current levels d) Ignoring inventory costs 10. What does inventory control primarily involve? a) Increasing inventory levels b) Administration of established policies, systems, and procedures c) Decreasing inventory control measures d) Ignoring inventory policies 11. What is the main objective of inventory control? a) To minimize the use of established policies b) To increase inventory costs c) To reduce inventory costs through efficient administration d) To avoid inventory systems and procedures 12. What does effective inventory control aim to achieve? a) Higher inventory costs b) Reduced inventory costs through the implementation of policies, systems, and procedures c) Ignoring established inventory policies d) Increased use of inventory without regulation 13. What is one of the objectives of inventory control? a) Ignoring demand fluctuations b) Meeting unforeseen future demand c) Creating demand fluctuations d) Avoiding customer requirements 14. What is an objective of inventory control related to production? a) Increasing production costs b) Smoothening the production process c) Introducing production fluctuations d) Halting production intermittently 15. What is an objective of inventory control concerning economic factors? a) Ignoring changes in inventory item prices b) Gaining economy of production or purchase in lots c) Increasing loss due to price changes d) Avoiding transportation time lag 16. What is an objective of inventory control related to minimizing losses? a) Increasing losses due to deterioration b) Balancing stock out cost against inventory costs c) Ignoring losses due to obsolescence or damage d) Maximizing losses due to pilferage 17. What is an objective of inventory control concerning human resources? a) Reducing labor relations b) Avoiding inventory of human resources c) Balancing stock out cost against inventory costs  Test Bank for (APSC 211) d) Stabilizing employment and improving labor relations 18. What is an objective of inventory control concerning production facilities? a) Halting production b) Facilitating intermittent production of several products on the same facility c) Increasing production disruptions d) Avoiding production facilities 19. What is an objective of inventory control concerning costs? a) Increasing order cost or set up cost b) Balancing various costs of inventory such as order cost and inventory carrying cost c) Ignoring stock out cost/opportunity cost d) Maximizing losses due to stock out costs 20. What is an objective of inventory control concerning demand fluctuations? a) Ignoring demand fluctuations b) Averaging out demand fluctuations due to seasonal or cyclic variations c) Increasing demand fluctuations d) Avoiding demand fluctuations entirely 21. What is one of the benefits of inventory control? a) Ensuring an inadequate supply of materials b) Maximizing inventory costs c) Minimizing inventory costs d) Leading to duplication in ordering 22. How does inventory control affect purchasing? a) Facilitates purchasing economies b) Hinders purchasing economies c) Leads to duplication in ordering d) Increases inventory costs 23. What does inventory control help in utilizing better? a) Available labor b) Available space c) Available stocks d) Available time 24. What does inventory control provide a check against? a) Loss of materials b) Excessive purchasing c) Inventory accuracy d) Financial statements 25. How does inventory control impact cost accounting activities? a) Facilitates cost accounting activities b) Hinders cost accounting activities c) Increases cost accounting errors d) Avoids cost accounting comparisons 26. What does inventory control enable management to do? a) Avoid cost comparison  Test Bank for (APSC 211) b) Ignore financial statements c) Perform cost comparison d) Increase inventory costs 27. What does inventory control help in locating and disposing of? a) Active and valuable items b) Inactive and obsolete store items c) New and innovative products d) High-demand items 28. What does inventory control help in eliminating? a) Adequate supply of materials b) Excessive purchasing c) Efficient utilization of stocks d) Cost accounting activities 29. What is the nature of dependent demand? a) Occurs independently of demand for any other product or service b) Linked with demand for another product, such as components, subassemblies, etc. c) Does not require forecasting d) Relates to finished products or service parts 30. Why do dependent demand items not require forecasting? a) Because their demand is independent of any other product b) Because their demand can be derived from the demand for independent items c) Because they are not important for inventory management d) Because their demand is constant 31. When does vertical dependency occur? a) When the demand for one item is not directly related to another item b) When the demand for one product is derived from demand for another product c) When the demand for both products is constant d) When the demand for one product exceeds the demand for another product 32. Which items require forecasting according to the statement? a) Only dependent demand items b) Only independent demand items c) Both dependent and independent demand items d) Neither dependent nor independent demand items 33. What does inventory value account for? a) Only finished products b) Varying proportions of raw materials, work in process parts, components, or finished products c) Only raw materials d) Only work-in-process parts 34. In which type of production is the inventory for raw materials and finished products typically high? a) Continuous production b) Batch production  Test Bank for (APSC 211) c) Job shop production d) Mass production 35. In which type of production is the inventory for work-in-process parts typically high? a) Continuous production b) Batch production c) Job shop production d) Mass production 36. What does ordering cost include? a) Capital cost b) Storage space cost c) Expenses from raising the indent and purchase requisition by user department d) Obsolescence cost 37. What is measured as a percentage of the unit cost of an item in inventory carrying costs? a) Capital cost b) Taxes on inventory c) Deterioration cost d) The volume of inventory 38. According to Aljian, what are included in carrying costs? a) Overtime payments b) Machine set-up c) Inventory service costs d) Start-up scrap generated from getting a production run started 39. What does out-of-stock costs refer to? a) Capital costs b) Lost sales and backordering c) Inventory risk costs d) Storage and handling costs 40. What are capacity costs related to? a) Lost sales b) Backordering c) Over-time payments and lay-offs d) Machine set-up and start-up scrap 41. What type of costs are associated with over-stocking? a) Capital costs b) Inventory carrying costs c) Set-up costs d) Out-of-stock costs 42. When is the total cost minimum in EOQ? a) When the cost of procurement and handling of inventory are at a maximum level b) When the cost of procurement and handling of inventory are at a minimum level c) When the cost of procurement and handling of inventory are balanced out d) When the total cost is irrelevant 43. What does EOQ deal with?  Test Bank for (APSC 211) a) The maximum level of inventory b) The minimum level of inventory c) When to order materials d) When the cost of procurement and handling of inventory are at an optimum level 44. In EOQ, why is the order quantity larger than a single period’s requirement? a) To increase ordering costs b) To decrease holding costs c) To balance out ordering costs and holding costs d) To minimize total costs 45. What is the main advantage of ABC Analysis? a) Helps to exercise non-selective control over inventory b) Considers only the money value of items c) Helps to point out obsolete stocks easily d) Makes periodic review difficult 46. How are "A" items selected in ABC Analysis? a) Items with the highest rupee percentages b) Items with the lowest rupee percentages c) Items with the highest annual usage in rupees d) Items with the lowest annual usage in rupees 47. What is one of the disadvantages of ABC Analysis? a) It helps in better planning of inventory control b) It considers only the money value of items and neglects their importance for the production process c) It provides a sound basis for the allocation of funds and human resources d) It gives rewarding results quickly 48. What is needed for proper standardization and codification of inventory items? a) Economic Order Quantity (EOQ) b) Just-In-Time (JIT) Inventory Management c) Safety stock d) ABC Analysis 49. What does VED classification stand for? a) Vital, Essential, and Diverse b) Value, Efficiency, and Duration c) Vital, Essential, and Desirable d) Value, Efficiency, and Dependability 50. How are vital items categorized in VED classification? a) Their shortage may cause havoc and stop the work in the organization b) Their non-availability does not affect the efficiency of operations c) They can be easily purchased from the market as and when needed d) They are stocked very low or not stocked at all 51. What is the characteristic of essential items in VED classification? a) Their shortage may cause havoc and stop the work in the organization b) They should be stocked very low or not stocked at all  Test Bank for (APSC 211) c) Their non-availability does not affect the efficiency of operations d) They should be sufficiently stocked to ensure smooth operation 52. What is the characteristic of desirable items in VED classification? a) Their shortage may cause havoc and stop the work in the organization b) They should be stocked very low or not stocked at all c) They can be easily purchased from the market as and when needed d) They are stocked adequately to ensure smooth operation 53. How is classification in FSN Analysis typically based? a) Pattern of purchases from stores b) Pattern of sales to customers c) Date of manufacture d) Date of expiry 54. In FSN Analysis, what is considered to determine the number of months which have lapsed since the last transaction? a) Date of manufacture b) Date of receipt c) Date of last issue d) Date of expiry 55. What is the purpose of FSN Analysis? a) To avoid investments in fast-moving items b) To facilitate timely control of inventory c) To categorize items based on their purchase value d) To determine the shelf life of items 56. What term is defined by the given description: System used in manufacturing and production management to efficiently plan and control the materials and components needed for the production process? a) Inventory management b) Supply chain management c) Production scheduling d) Material requirements planning (MRP) 57. What philosophy follows nearly the same principle as Just in Time (JIT) manufacturing, where the company maintains inventory only when the consumer needs the goods? a) Economic Order Quantity (EOQ) b) Zero Defects c) Total Quality Management (TQM) d) Zero Inventories 58. What inventory management method is described in the statement? a) Economic Order Quantity (EOQ) b) Just-in-Time (JIT) c) Material Requirements Planning (MRP) d) Batch Production 59. What is the primary objective of the described inventory management method? a) Maximizing inventory holding costs  Test Bank for (APSC 211) b) Minimizing lead times c) Minimizing inventory holding costs d) Maximizing safety stock levels 60. What does the described inventory management method aim to minimize? a) Excess inventory holding costs b) Lead times c) Production costs d) Demand variability 61. Which factor is crucial for the successful implementation of the described inventory management method? a) Large order quantities from suppliers b) Long lead times c) Efficient communication and coordination with suppliers d) High levels of safety stock 62. What is safety stock used to protect against? a) Expected fluctuations in demand b) Expected fluctuations in supply c) Unexpected fluctuations in demand d) Unexpected fluctuations in supply 63. Why does a company or organization maintain safety stock? a) To reduce costs b) To increase lead times c) To protect against unexpected fluctuations in demand or supply d) To decrease inventory levels 64. When is safety stock typically used? a) During periods of high demand b) During periods of low demand c) During periods of stable demand d) During periods of unexpected fluctuations in demand or supply 65. What is the purpose of safety stock in inventory management? a) To maximize profit b) To minimize costs c) To ensure customer satisfaction d) To mitigate the risk of stockouts due to unexpected fluctuations in demand or supply 66. How does safety stock help in inventory management? a) By reducing lead times b) By increasing inventory turnover c) By protecting against unexpected fluctuations in demand or supply d) By minimizing the need for replenishment orders 67. What is one of the benefits of safety stock? a) Increase in stockouts b) Decrease in customer satisfaction c) Reduction of lead times  Test Bank for (APSC 211) d) Increase in supply chain disruptions 68. How does safety stock contribute to supply chain management flexibility? a) By reducing the need for buffer stock b) By increasing lead times c) By acting as a buffer against disruptions in the supply chain d) By minimizing customer satisfaction 69. What does safety stock act as a buffer against? a) Increased demand b) Disruptions in the supply chain c) Decreased lead times d) Decreased customer satisfaction 70. How does safety stock help in reducing production delays? a) By increasing the need for expedited shipments b) By causing stockouts c) By providing extra inventory to fulfill orders promptly d) By minimizing the need for safety stock 71. What is one of the cost-saving benefits of safety stock? a) Increased need for expedited shipments b) Increased production delays c) Decreased order fulfillment efficiency d) Reduced need for expedited shipments and minimized production delays 72. What factor influences the need for safety stock by increasing the potential for unexpected fluctuations in customer demand? a) Lead time variability b) Supplier reliability c) Seasonality d) Demand variability 73. Why might organizations need to maintain higher levels of safety stock? a) Due to lower demand variability b) To compensate for shorter lead times c) To mitigate the risk of stockouts caused by unreliable suppliers d) During periods of low demand 74. What may necessitate an increase in safety stock levels during production? a) Increased forecast accuracy b) Reduced lead time variability c) Production constraints or bottlenecks d) Decreased risk of supply chain disruptions 75. What factor influences the decision to hold higher levels of safety stock by considering potential costs such as lost sales and damage to reputation? a) Cost of stockouts b) Seasonality c) Forecast accuracy d) Supplier reliability  Test Bank for (APSC 211) 76. Why might organizations need to maintain higher levels of safety stock to mitigate the impact of supply chain disruptions? a) To increase lead time variability b) To decrease production constraints c) Due to decreased forecast accuracy d) To compensate for the risk of supply chain disruptions 77. What is the primary purpose of forecasting? a) Production b) Inventory c) Personnel d) Predicting a future event 78. Which of the following is considered the underlying basis of all business decisions? a) Production b) Inventory c) Personnel d) Forecasting 79. In which aspect of business management is forecasting particularly important? a) Facilities b) Production c) Inventory d) Personnel 80. What does forecasting help businesses predict? a) Past events b) Future events c) Current events d) Random events 81. Which of the following is NOT typically considered a component of forecasting? a) Historical data analysis b) Market research c) Inventory management d) Statistical modeling 82. Which time horizon does short-range forecasting typically cover? a) Up to 1 month b) Up to 6 months c) Up to 1 year, generally less than 3 months d) 3 months to 3 years 83. What are medium-range forecasts mainly used for? a) Purchasing and job scheduling b) Sales and production planning c) New product planning and research and development d) Facility location and capital expenditures 84. Which of the following is NOT typically covered by long-range forecasts? a) New product planning  Test Bank for (APSC 211) b) Facility location c) Job assignments d) Research and development 85. Which aspect of business planning is long-range forecasting particularly important for? a) Purchasing b) Job scheduling c) Capital expenditures d) Production levels 86. What do medium/long-range forecasts primarily support management decisions regarding? a) Daily operations b) Short-term goals c) Comprehensive issues and planning for products, plants, and processes d) Tactical decision-making 87. Which type of forecasting usually employs different methodologies than longer-term forecasting? a) Short-term forecasting b) Medium-range forecasting c) Long-range forecasting d) Tactical forecasting 88. What does demand forecasting primarily predict? a) Economic indicators b) Technological progress c) Sales of existing products and services d) Impact on new product development 89. Which type of forecast predicts housing starts and inflation rates? a) Economic forecasts b) Technological forecasts c) Demand forecasts d) Production forecasts 90. What is the purpose of demand forecasts? a) To predict the rate of technological progress b) To address aspects of the business cycle c) To predict sales of existing products and services d) To forecast economic indicators 91. How does forecasting impact supply chain management? a) It has no effect on supplier relations or product innovation b) It leads to decreased product innovation but better supplier relations c) It improves supplier relations, aids in product innovation, and impacts speed to market d) It only affects cost management 92. What aspect of human resources does forecasting influence? a) Employee morale  Test Bank for (APSC 211) b) Employee benefits c) Hiring, training, and laying off workers d) Workplace culture 93. What can capacity shortages resulting from inadequate forecasting lead to? a) Increased market share b) Decreased customer loyalty c) Dependable delivery d) Loss of customers and market share 94. Which step in the forecasting process involves selecting the items to be forecasted? a) Step 1: Determine the use of the forecast b) Step 2: Select the items to be forecasted c) Step 3: Determine the time horizon of the forecast d) Step 4: Select the forecasting model(s) 95. What is the purpose of determining the time horizon of the forecast? a) To gather the data needed for the forecast b) To validate and implement the results of the forecast c) To determine the use of the forecast d) To establish the timeframe over which the forecast will be made 96. When is the forecasting model(s) selected in the forecasting process? a) At the beginning of the process b) After gathering the data needed for the forecast c) After making the forecast d) During the validation and implementation of the results a) Step 7: Validate and implement the results 97. What is the primary purpose of a warehouse in the logistics system? a) Transporting goods between different locations b) Storing and holding goods c) Distributing goods directly to customers d) Managing inventory levels in retail stores 98. Which of the following is NOT a function of warehousing? a) Transportation consolidation b) Product mixing c) Customer service d) Protection against contingencies 99. What does product mixing involve in warehousing? a) Combining different products into new packages b) Sorting products based on size and weight c) Mixing raw materials to create finished goods d) Mixing similar products from different sources to fulfill orders 100. What does docking typically refer to in warehousing? a) Unloading goods from trucks or vessels b) Storing goods in designated warehouse spaces c) Organizing products on shelves for easy access  Test Bank for (APSC 211) d) Packaging goods for 101. What function does warehousing serve in protecting against contingencies? a) Providing insurance for goods stored in the warehouse b) Storing backup inventory in case of shortages c) Implementing security measures to prevent theft or damage d) Offering repair services for damaged goods 102. What utility does warehousing provide for goods? a) Form utility b) Time and place utility c) Possession utility d) Quantity utility 103. Which of the following is NOT mentioned as benefiting from warehousing? a) Finished products b) Raw materials c) Industrial goods d) Consumer electronics 104. How does warehousing contribute to making customer service a competitive tool? a) By reducing the need for customer service b) By increasing the cost of customer service c) By providing faster delivery and convenient storage options d) By limiting the availability of goods to customers 105. What is the primary value that warehousing adds to goods? a) Cost reduction b) Time and place utility c) Enhanced branding d) Quality improvement 106. In what way does warehousing enable firms to use customer service as a dynamic value-adding competitive tool? a) By reducing the need for customer service interactions b) By providing storage space for customer service representatives c) By facilitating faster and more efficient order fulfillment d) By limiting access to products for customers  Test Bank for (APSC 211) 1. True or False: Inventory solely comprises finished goods. 2. True or False: Work-in-process is not considered part of inventory. 3. True or False: The term "inventory" encompasses only raw materials. 4. True or False: Stores and spares are not included in the definition of inventory. 5. True or False: Inventory includes raw materials, work-in-process, finished goods, and stores & spares. 6. True or False: Work-in-process is considered part of inventory. 7. True or False: The term "inventory" encompasses raw materials, work-in-process, finished goods, and stores & spares. 8. True or False: Stores and spares are included in the definition of inventory. 9. True or False: Inventory Control involves measuring and regulating inventory according to predetermined norms. 10. True or False: Safety stock is not considered in the process of Inventory Control. 11. True or False: Inventory Control includes regulating inventory based on factors such as economic lot size for order or production, safety stock, minimum level, maximum level, and order level. 12. True or False: Inventory Control does not involve measuring inventory levels. 13. True or False: Inventory control primarily involves the administration of established policies, systems, and procedures. 14. True or False: One objective of inventory control is to increase demand fluctuations. 15. True or False: Inventory control aims to stabilize employment and improve labor relations by managing human resources effectively. 16. True or False: An objective of inventory control is to ignore technological constraints of production/process. 17. True or False: Inventory control aims to maximize losses due to deterioration, obsolescence, damage, and pilferage. 18. True or False: Inventory control leads to duplication in ordering. 19. True or False: Better utilization of available stocks is a benefit of inventory control. 20. True or False: Inventory control does not provide a check against the loss of materials. 21. True or False: Inventory control hinders cost accounting activities. 22. True or False: Management cannot use inventory control for cost comparison. 23. True or False: Inventory control does not involve locating and disposing of inactive and obsolete store items. 24. True or False: Financial statements based on inventory control are inconsistent and unreliable. 25. True or False: Independent demand items include components, subassemblies, lubricants, cutting oil, and greases. 26. True or False: Inventory value only accounts for finished products. 27. True or False: In continuous production or mass production, the inventory for raw materials and finished products is low, while that of work-in-process parts is high. 28. True or False: In batch production or job shop production, the inventory for raw materials and finished products is high, while that of work-in-process parts is low.  Test Bank for (APSC 211) 29. True or False: Ordering costs include expenses such as capital costs and obsolescence costs. 30. True or False: Inventory carrying costs are not measured as a percentage of the unit cost of an item. 31. True or False: Out-of-stock costs do not include backordering. 32. True or False: Other costs related to capacity include machine set-up and start-up scrap. 33. True or False: Over-stocking costs are not considered in inventory management. 34. True or False: EOQ (Economic Order Quantity) system involves ordering materials only once a year. 35. True or False: In EOQ, the total cost is minimum when the cost of procurement and handling of inventory are at a maximum level. 36. True or False: EOQ deals with determining when to order materials rather than focusing on the cost of procurement and handling of inventory. 37. True or False: The main objective of EOQ is to maximize total costs. 38. True or False: EOQ assumes that demand for the product is variable. 39. True or False: EOQ assumes that lead time varies over time. 40. True or False: EOQ assumes that the price per unit may fluctuate. 41. True or False: Minimum level is the stock level at which an order should be placed. 42. True or False: Maximum level is the minimum stock to be maintained for smooth production. 43. True or False: Reorder level is the level of stock beyond which a firm should not maintain the stock. 44. True or False: Safety stock is stock for usage at the normal rate during the extension of lead time. 45. True or False: Reserve stock is the excess usage requirement during normal lead time. 46. True or False: Buffer stock represents the stock level at which an order should be placed. 47. True or False: ABC Analysis categorizes inventory into four categories: A, B, C, and D. 48. True or False: ABC Analysis is also known as Selective Inventory Control Method (SIM). 49. True or False: The main advantage of ABC Analysis is that it helps to exercise non- selective control over inventory. 50. True or False: According to ABC Analysis, "A" items are the ones with the lowest rupee percentages. 51. True or False: ABC Analysis considers only the money value of items and neglects their importance for the production process or assembly. 52. True or False: ABC Analysis provides a sound basis for the allocation of funds and human resources. 53. True or False: One of the disadvantages of ABC Analysis is that it makes periodic review difficult. 54. True or False: VED classification categorizes inventories into three categories: Vital, Essential, and Desirable. 55. True or False: Vital items are those whose shortage may cause havoc and stop the work in the organization.  Test Bank for (APSC 211) 56. True or False: Essential items are those whose non-availability does not affect the efficiency of operations. 57. True or False: VED classification is particularly useful in service industries but not in capital-intensive industries. 58. True or False: FSN Analysis categorizes items into three categories: Fast moving, Slow moving, and Non-moving. 59. True or False: FSN Analysis is based on the pattern of purchases from stores. 60. True or False: In FSN Analysis, the date of receipt or last date of issue, whichever is earlier, is taken to determine the number of months which have lapsed since the last transaction. 61. True or False: The Bill of Materials (BOM) involves creating or updating a detailed list of all the components, sub-assemblies, and materials required to manufacture the final product. 62. True or False: Planned Orders are generated for materials that need to be replenished or produced, taking into account safety stock levels and order quantities. 63. True or False: The philosophy of zero inventories follows the same principle as Just in Time (JIT) manufacturing, where inventory is maintained only when the consumer needs the goods. 64. True or False: The statement describes the inventory management method known as "Just- in-Time" (JIT). 65. True or False: With the described inventory management method, goods are received from suppliers in large quantities regardless of immediate need. 66. True or False: Just-in-Time (JIT) inventory management aims to minimize inventory holding costs by receiving goods only when needed for production or sale. 67. True or False: The method described in the statement increases the risk of excess inventory and storage costs. 68. True or False: The described inventory management method is commonly associated with long lead times and high levels of safety stock. 69. True or False: Safety stock refers to the additional inventory maintained by a company or organization to protect against unexpected fluctuations in demand or supply. 70. True or False: Safety stock is the excess inventory maintained to protect against expected fluctuations in demand or supply. 71. True or False: Safety stock is an inventory buffer used to mitigate the risk of stockouts caused by unexpected changes in demand or supply. 72. True or False: Safety stock helps in reducing lead times in inventory management. 73. True or False: Safety stock is typically used during periods of stable demand. 74. True or False: Safety stock is primarily used to prevent stockouts caused by expected fluctuations in demand or supply. 75. True or False: Safety stock improves customer satisfaction by reducing lead times in inventory management. 76. True or False: Safety stock can result in cost savings by minimizing production delays and avoiding lost sales due to stockouts. 77. True or False: Higher demand variability decreases the need for safety stock as it provides a buffer against unexpected fluctuations in customer demand.  Test Bank for (APSC 211) 78. True or False: Longer or more variable lead times require lower levels of safety stock to compensate for potential delays in replenishing inventory. 79. True or False: If a supplier has a history of late deliveries or unreliable performance, organizations may need to maintain lower levels of safety stock to mitigate the risk of stockouts. 80. True or False: During peak seasons or periods of high demand, organizations may need to decrease safety stock levels to meet customer demands. 81. True or False: Personnel management does not involve forecasting. 82. True or False: Forecasting is a one-time process and does not require ongoing monitoring or adjustment. 83. True or False: Short-range forecasts typically cover a time horizon of up to 1 year, generally less than 3 months. 84. True or False: Medium-range forecasts are mainly used for new product planning and research and development. 85. True or False: Long-range forecasts typically cover a time horizon of 3 months to 3 years. 86. True or False: Short-range forecasts are suitable for production planning and budgeting. 87. True or False: Medium/long-range forecasts mainly address comprehensive issues and support management decisions regarding planning and products, plants, and processes. 88. True or False: Short-term forecasting typically utilizes the same methodologies as longer- term forecasting. 89. True or False: Economic forecasts primarily focus on predicting the sales of existing products and services. 90. True or False: Forecasting plays a strategic role in supply chain management, affecting supplier relations, product innovation, and speed to market. 91. True or False: Forecasting does not have any impact on human resources decisions such as hiring, training, and laying off workers. 92. True or False: Strategic forecasting in supply chain management can give businesses advantages in cost management but not in product innovation. 93. True or False: Forecasting is primarily concerned with capacity management and does not impact other areas of business strategy. 94. True or False: The first step in forecasting is to determine the use of the forecast. 95. True or False: Validating and implementing the results of the forecast is not necessary for its accuracy. 96. True or False: Determining the time horizon of the forecast is one of the initial steps in forecasting. 97. True or False: Customer service is not considered a competitive advantage in the context of warehousing. 98. True or False: Warehousing allows firms to add value to their offerings by providing time and place utility. 99. True or False: Warehousing does not play a role in making customer service a dynamic and competitive tool.