Exam 21: Management of Short-Term Assets: Inventory

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Given that the manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt,calculate the economic order quantity if sales increased by 100 per cent.

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Given that the manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt,calculate the average investment in inventories per year.

Moors Manufacturing Ltd uses 5000 square metres of steel each year in its production process.Storage costs are $1 50 per square metre per year.Acquisition costs are $600 per order.What is the economic order quantity?

The level of acquisition costs incurred per year is equal to:

Current assets are those assets that will normally be converted into cash within a ________.

The ___________ system of inventory management is based on the concept that raw materials,equipment and labour are each supplied only in the amounts required and at the times required to complete the manufacturing task.

Bounce Rubber Store sells 50 000 tyres per year.The wholesale price is $200 per tyre.The cost of processing each order to be placed with the wholesaler is $50 and carrying costs are $1 per tyre per year.What is the economic order quantity?

The opportunity to invest elsewhere rather than tie up capital in inventory is an example of:

The size of a company's 'safety stock' is usually dependant on the probability of a stockout occurring and the desired level of customer service the company seeks to provide.

Quantity discounts forgone refers to:

Bounce Rubber Store sells 50 000 tyres per year.The wholesale price is $200 per tyre.The cost of processing each order to be placed with the wholesaler is $50 and carrying costs are $1 per tyre per year.What is the optimal time period between orders?

Which of the following statements is false?

Which of the following statements is true?

Which of the following statements is false?

Which of the following statements with regards to inventory management under uncertainty is true?

__________ stock is additional inventory that is held when demand is uncertain,to reduce the probability of a stockout.

An example of a stockout cost for a manufacturer is:

Carrying costs:

The economic order quantity model assumes that demand for a product increases with time.

Which of the following is not a type of short-term asset held by businesses?