Question 1

Tommy orders baking equipment, according to the EOQ model with each order being for 50 units. Their
carrying cost is 10%, and their order cost is P200. The equipments were purchased at a price of P800
each. What is the optimal number of orders per year?

Response: 10

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Question 2

A company is planning to stock a new SKU which is classified as an A inventory item. The company has
the following information: annual usage is 5,000 units; cost of the SKU is P300; ordering cost is P30 per
order; and carrying cost is 10 percent per year of average inventory value held. How much is the optimal
value per order?

Response: P30,000

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Question 3

Tommy orders baking equipment, according to the EOQ model with each order being for 50 units. Their
carrying cost is 10%, and their order cost is P200. The equipments were purchased at a price of P800
each. How much is the minimum inventory cost at the EOQ level?

Response: P3,850

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Question 4

In the EOQ model, the average inventory per cycle over many cycles is Q/2.
Response: True

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Question 5

Tommy orders baking equipment, according to the EOQ model with each order being for 50 units. Their
carrying cost is 10%, and their order cost is P200. The equipments were purchased at a price of P800
each. What is the annual value of the equipments purchased by Tommy?

Response: P40,000

400,000

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Question 6

The time between placing orders is the lead time.

Response: False

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Question 7

To be considered as inventory, goods must be finished and waiting for delivery.

Response: False

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Question 8

A company is planning to stock a new SKU which is classified as an A inventory item. The company has
the following information: annual usage is 5,000 units; cost of the SKU is P300; ordering cost is P30 per
order; and carrying cost is 10 percent per year of average inventory value held. How much is the
minimum inventory cost at the EOQ level?

Response: P3,000

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Question 9

Which cost would not be considered part of a holding cost?

Response: shipping cost

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Question 10

A company is planning to stock a new SKU which is classified as an A inventory item. The annual usage
for this SKU is 5,350 units; cost of the SKU is P360 per unit; ordering cost is P50 per order; carrying cost
is 25% per year of inventory value held. Determine the total annual value usage.

Response: P1,926,000

Question 1 of 10
2 Points

A company is planning to stock a new SKU which is classified as an A inventory item. The
company has the following information: annual usage is 5,000 units; cost of the SKU is P300;
ordering cost is P30 per order; and carrying cost is 10 percent per year of average inventory
value held. What is the optimal number of orders per year?

Select the correct response:

  500

 25

 50

 5

Question 3 of 10
2 Points

A company is planning to stock a new SKU which is classified as an A inventory item. The
company has the following information: annual usage is 5,000 units; cost of the SKU is P300;
ordering cost is P30 per order; and carrying cost is 10 percent per year of average inventory
value held. Determine the optimal number of units per order?

Select the correct response:

 75

 100

 60

 150

Question 4 of 10
2 Points

What is the term used for the cost incurred in maintaining an inventory?

Select the correct response:

 variable cost
  fixed cost

 ordering cost

 carrying cost

Question 10 of 10
2 Points

Inventory

Select the correct response:

 All of the alternatives are correct.

 is not something that can be managed effectively.

 is held against uncertain usage so that a supply of items is available if needed.

 constitutes a small part of the cost of doing business.

Question 1 of 10
2 Points

Caroline the owner of Caroline’s Boutique, Ltd., estimates that she will sell 40 decorator table
this year worth
10,000.Heraccountantshavedeterminedthatorderingcostsamountsto25 per
order and that
the carrying costs amount to 12 ½ percent of the average inventory. How much is the total
inventory cost of ordering 10 times a year?

Select the correct response:

 $278
  $264

 $313

 $332

Question 6 of 10
2 Points

The EOQ model

Select the correct response:

 considers total cost.

 All of the alternatives are correct.

 minimizes both ordering and holding costs.

 determines only how frequently to order.

Question 3 of 10
2 Points

A company is planning to stock a new SKU which is classified as an A inventory item. The
annual usage for this SKU is 5,350 units; cost of the SKU is P360 per unit; ordering cost is P50
per order; carrying cost is 25% per year of inventory value held. Determine the optimal number
of orders per year.

Select the correct response:

 59 orders per year

 50 orders per year

  69 orders per year

 60 orders per year

Question 8 of 10
2 Points

Caroline the owner of Caroline’s Boutique, Ltd., estimates that she will sell 40 decorator table
this year worth $10,000. Her accountants have determined that ordering costs amounts to $25 per
order and that
the carrying costs amount to 12 ½ percent of the average inventory. How much is the total
inventory cost of ordering 8 times a year?

Select the correct response:

 None of the choices

 $250

 $278

 $264

Question 9 of 10
2 Points

Constant demand is a key assumption of the EOQ model.

Select the correct response:

 True

 False