Chapter 8

When a retailer uses daily sales of each product to identify patterns and to forecast inventory requirements, this is an example of:

a time series forecasting technique.

On an annual requirement of 100 items spread evenly throughout the year, any purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $150. If the inventory carrying cost is 25 percent per year and assuming no ordering costs:

buying 100 at a time will save the company $3,937.50 per year.

The demand for a particular service may be:

continuous, discrete, or periodic.

A reduction in set-up costs and time impacts:

cycle inventories.

Continuous Planning, Forecasting and Replenishment (CPFR) generates the most accurate forecast possible and develops effective replenishment plans by:

enabling supply management to collaborate internally with other functions.

"A" items in ABC analysis are:

particularly critical in financial terms.

Capacity requirements planning (CRP):

performs for manufacturing resources what MRP does for materials.

A material requirements planning (MRP) system:

requires exploration of the bill of material as the basis of planning.

The following cost is not a carrying, holding, or possession cost:

the purchase price of the item.

Decoupling inventories are carried:

to make it possible to carry on activities on each side of a major process linkage point independently of each other.