4. Which one of the following statements about quantity discounts is BEST A) The

Question

4. Which one of the following statements about quantity discounts is BEST A) The minimum cost point on each price curve is always feasible. B) A price break is the maximum quantity needed to get a discount. C) If the EOQ for the lowest price is feasible, this is the best lot size. D) Either price or quantity is sufficient for the search for the best lot size rat the Great Professional restaurant for the first 5. Demands for a newly developed salad bar at the Great Professional resto T this year are shown in the following table. What is the forecast for July if the 3- month weighted moving-average method is used? (Use weights of 0.5 for the most demand, 0.3, and 0.2 for the oldest demand. Show your calculation for partii Month Demand (Units) January February March April May June 394 365 380 439 412 467 A) fewer than or equal to 432 units B) greater than 432 units but fewer than or equal to 442 units C) greater than 442 units but fewer than or equal to 452 units D) greater than 452 6. Which one of the following is most useful for measuring the bias in a forecast? A) cumulative sum of forecast errors B) standard deviation of forecast errors C) mean absolute deviation of forecast errors D) percentage forecast error in period t. 7. Which of the following DOES NOT generate pressure to decrease inventories? A) taxes and insurance B) inventory holding costs C) storage and handling costs D) ordering costs 8. What is generally true about the class A SKUs in ABC analysis? They represent about: AY50 percent of all SKUS. BY 80 percent of all SKUS. C) 20 percent of the dollar usage. (D) 80 percent of the dollar usage.

Explanation / Answer

5. C (using time series method it can be found)

6. A. (Cumulative sum of forecast errors)-this is the method to resolve biasness

7. D. (ordering costs can never generate pressure to decrease inventories, it is but obvious and simple to understand)

8. D. (80% of dollar usage; or in tems of percentage of SKUs it is 20%, hence from above D is correct option)

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