Exam 21: Management of Short-Term Assets: Inventory

The matching principle involves matching the maturity structure of assets and liabilities to minimise the risk that a company will not have sufficient cash to meet liabilities as they fall due.

Effective just-in-time operation requires:

Inventory management involves determining:

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,what is the economic order quantity?

A standard approach to inventory management under uncertainty is to:

The 'just-in-time' system of inventory control can be best explained as the:

The cost of price movements refers to:

The relevant costs to be included in the economic order quantity model are __________ costs.

Super Furniture Ltd produces sofas.Demand is 6500 sofas per year.Each production run costs $2250 to set up.Storage costs are $42 per sofa per year.What is the optimal number of runs per year?

Which of the following statements is true?

Australia Boxes sells 6000 boxes per year.The processing cost of each order is $10 and carrying costs are 50 cents per box per year.The optimal time period between orders for this company is bi-monthly.

An example of stockout costs is:

Which of the following statements is true?

Consider the following data supplied by Cotton Tops,a t-shirt distributor: The manager charges equipment set-up costs as a separate cost to the purchase price of $4.92 per t-shirt.Calculate the total inventory costs if the manufacturer offered Cotton Tops a 2 per cent quantity discount for orders of 10 000 or more and Cotton Tops' economic order quantity is 10 000 units.

Consider the following data supplied by Cotton Tops,a t-shirt distributor: Calculate the reorder point if Cotton Tops ordered 1000 tops every two weeks and the delivery time was three weeks.

The opportunity cost of investment refers to:

Which model assumes that demand for the product is constant and known with certainty?

Freight and handling costs are classified as:

ABC Ltd sells 12 000 rolls of films per year.The wholesale price is $3 per roll.The cost of processing each order to be placed with the wholesaler is $12.50 and carrying costs are 30 cents per roll per year.What is the EOQ?

The costs of holding inventory are generally classified into three groups.The three groups are: