Question

Which of the following methods can be used to forecast the demand for a NEW product? OA) average demand OB ) exponential smoothing OC) equation fitting OD ) moving averages OE) qualitative techniques

Which of the following statements concerning inventory management objectives is false? O Knowing how much inventory should be ordered at one time. Provide the required level of customer service. Reduce the sum of all costs involved. When the order is placed is not a priority.

All are true about quantity discounts except: Encourages buyers to buy more than normal. Increases inventory ordering costs. Increases inventory carrying costs . Savings from lower unit costs must be enough to offset the higher inventory carrying costs.

Answer 1

1. Answer is Qualitative Techniques can be used to forecast the demand for new product.The qualitative method is when you forecast demand when there is no prior data or sales numbers to work with by using the opinions of a group of experts.

2. Order placed is not a priority is a false statement with regard to inventory management. This is because efficient completion of the order is also important objective of inventory management. EOQ calculates the ordering quantity of inventory using inputs of carrying cost, ordering cost, annual usage of the said inventory.

3. Quantity Discounts decrease the Inventory Ordering Costs. When quantity discounts are offered price per unit decreases and quantity ordered increases. In this case there is a separate U shaped total cost curve for each unit price. The total cost curve drops with the decrease in the unit price.