Chapter 12 Inventory Management Section 1 The Importance of Inventory
B
6) Which of the following statements regarding Amazon.com is FALSE? A) The company was opened by Jeff Bezos in 1995. B) The company was founded as, and still is, a "virtual" retailer with no inventory. C) The company is now a world-class leader in warehouse automation and management. D) The company uses both United Parcel Service and the U.S. Postal Service as shippers. E) Amazon obtains its competitive advantage through inventory management.
E
7) Which of the following is a function of inventory? A) to decouple various parts of the production process B) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand C) to take advantage of quantity discounts D) to hedge against inflation E) All of the above are functions of inventory.
TRUE
A major challenge in inventory management is to maintain a balance between inventory investment and customer service.
FALSE
According to the global company profile, Amazon.com's advantage in inventory management comes from its almost fanatical use of economic order quantity and safety stock calculations.
TRUE
One function of inventory is to take advantage of quantity discounts.
FALSE
Which item to order and with which supplier the order should be placed are the two fundamental issues in inventory management.
D
Which of the following is NOT one of the four main types of inventory? A) raw material inventory B) work-in-process inventory C)maintenance/repair/operating supply inventory D) safety stock inventory E) finished-goodsinventory
D
Which of the following would NOT generally be a motive for a firm to hold inventories?A) to decouple various parts of the production process B) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand C) to take advantage of quantity discounts D) to minimize holding costs E) to hedge against inflation
FALSE
Work-in-process inventory is devoted to maintenance, repair, and operating materials.