Exam 11: Managing Economies of Scale in the Supply Chain: Cycle Inventory

The fixed ordering cost includes all costs that do not vary with the size of the order but are incurred each time an order is placed.

Which cost takes into account the return demanded on the firm's equity and the amount the firm must pay on its debt?

Increasing the lot size or cycle inventory often decreases the cost incurred by different stages of a supply chain.

A discount is volume-based if the pricing schedule offers discounts based on the quantity ordered in a single lot.

The practice where a firm charges differential prices to maximize profits is

When the retailer decides to pass through some or all of the promotion to customers to spur sales,the result is

Trade promotions lead to a significant ________ in lot size and cycle inventory because of forward buying by the ________.

Describe the impact of trade promotions on cycle inventory.

A price discount where the pricing schedule offers discounts based on the quantity ordered in a single lot is

Aggregating across products,retailers,or suppliers in a single order allows for a reduction in lot size for individual products because

Which of the following is not an input for Lot Sizing for a Single Product?

A(n)________ occurs when a retailer purchases in the promotional period for sales in future periods.

Inventory holding cost does not include which of the following?

When developing estimates for holding and ordering costs,it is important to

Discuss the role of cycle inventory in the supply chain.

Inventory holding costs would include which of the following?

Trade promotions lead to a significant increase in lot size and cycle inventory because of forward buying by the retailer.

Which cost should reflect the incremental change in space cost due to changing cycle inventory?

In the pricing schedule for marginal unit quantity discounts

Tastee Mart sells Frostee Flakes.Demand for Frostee Flakes is 500 boxes per week.Tastee Mart has a holding cost of 30 percent and incurs a fixed cost of $100 for each replenishment order it places for Frostee Flakes.Given that cost is $2 per box of Frostee Flakes,how much should Tastee Mart order in each replenishment lot? If a trade promotion lowers the price of Frostee Flakes to $1.80 for a month,how much should Tastee Mart order given the short-term price reduction?