Exam 20: Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

The system that ensures that parts or materials are available when needed is called the system.

Which of the following is NOT considered a carrying cost?

A marker or card that signals to a supplier the quantity of materials that need to be delivered and the time of delivery is a

A marker or card that specifies the quantity that a subsequent process should take from a preceding process is a

The costs of holding inventory are called costs.

Dry Creek Company decreased the size of inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

The theory of constraints uses the following five steps to achieve its goal of improving organizational performance: 1) Exploit the binding constraints. 2) Elevate the organization's binding constraints. 3) Identify an organization's constraints. 4) Repeat the process as a new constraint emerges to limit output. 5) Subordinate everything else to the decisions made when exploiting the binding constraints. What is the correct order for performing these steps?