1.Service parts sold to the repair shops are
examples of dependent demand.
2. Dependent
Demand must be forecasted based on market conditions.
3. The
four broad categories of inventory are raw materials, work-in-process,
subassemblies, and finished goods.
4. Inventory
turnover ratio shows how many times a firm turns over its inventory in an
accounting period. Faster turnovers are generally viewed as negative because it
indicates instability in the firm’s inventory level.
5. The
term Cycle Counting is synonymous with physically counting inventory.
6. The
ABC inventory control system categorizes inventory items into three groups, A,
B, and C. A items are given highest priority, while C items have the lowest
priority. Prioritization may be based on annual dollar usage, shelf life, or
sales volume.
7. Pareto
Analysis is an inventory model used to determine the optimal order size that
minimizes total annual inventory costs.
8. The
ABC inventory matrix shows an ABC inventory classification based on annual
usage on the vertical axis and an ABC inventory classification based on
physical inventory on the horizontal axis.
9. Radio
Frequency Identification (RFID) is considered an eventual replacement of bar
code because of its ability to store huge amount of information to
differentiate specific unit of good.
10. Electronic
Product Code (EPC) is the only RFID standard adopted by the commercial sector
and the U.S. Department of Defense.
