1. Inventory carrying cost is least for- Select one: a. Lot for lot orders b. AB

Question

1. Inventory carrying cost is least for-

Select one:

a. Lot for lot orders

b. ABC analysis based ordering

c. Economic Order Quantity (EOQ)

d. Fixed period quantity

e. Fixed order quantity

2. The formula of Mean Absolute Deviation (MAD). MAD is equal to -

Select one:

a. Sum of absolute deviations/Number of observations

b. Number of observations/(Number of observations + Sum of absolute deviations)

c. (Number of observations+ Sum of absolute deviations)/Number of observations

d. (Number of observations-Sum of absolute deviations)/Number of observations

e. Number of observations/Sum of absolute deviations

3. Economic Order Quantity (EOQ) will double if-

Select one:

a. Demand becomes four times

b. Item cost becomes half

c. Demand doubles

d. Item cost doubles

e. Item cost becomes four times

4. When prices are falling which method of inventory valuation overvalues the value of inventory?

Select one:

a. Standard cost

b. Average cost

c. First in First out (FIFO)

d. First in Last out (FILO)

e. Last in First out (LIFO)

5. The value of alpha (smoothing constant) in Exponential smoothing should be-

Select one:

a. More than one

b. Between zero and one

c. Less than one

d. Less than zero

e. Equal to one

Explanation / Answer

1. option c is the correct answer

  The Economic Order Quantity (EOQ) is the number of units that a company should add to inventory with each order to minimize the total costs of inventory

2.option a is the correct answer

mean absolute deviations = sum of absolute deviations / number of observations

3. option c is the correct answer

economic order of quantity will double if you order twice as much at a time

that means demand gets doubled up

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