exam two - omis 340

True 

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: when to order and how much to order.

True

The calculation of safety stock requires knowledge of demand and lead time variability.

True

The total cost curve is relatively flat near the EOQ.

False 

The objective of inventory management is to minimize the cost of holding inventory.

False

A retail store that carries twice as much inventory as its competitor will provide twice the customer service level.

False

EOQ inventory models are basically concerned with the timing of orders.

False

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

True 

Advanced communications has aided globalization.

True

An example of a regional factor in location planning is the location of our markets (either existing or potential).

True

Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost 

False

Labor laws are an important site-related factor

False 

In making location decisions, service and retail are typically governed by the same considerations than manufacturing organization. 

True 

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable. 

False

A strategy that emphasizes convenience for the customers would probably select a single very large facility.

False

Web-based, retail businesses should be located near the customer to reduce their long distance phone charges.

True

Annual ordering cost is inversely related to order size.