Discussion Questions and Problems

Discussion Questions

  1. 6-1 Why is inventory an important consideration for managers?

  2. 6-2 What is the purpose of inventory control?

  3. 6-3 Under what circumstances can inventory be used as a hedge against inflation?

  4. 6-4 Why wouldn’t a company always store large quantities of inventory to eliminate shortages and stock­outs?

  5. 6-5 What are some of the assumptions made in using the EOQ?

  6. 6-6 Discuss the major inventory costs that are used in determining the EOQ.

  7. 6-7 What is the ROP? How is it determined?

  8. 6-8 If the ROP is greater than the order quantity, explain how the ROP is implemented. Can the ROP be more than twice the order quantity, and, if so, how is such a situation handled?

  9. 6-9 Let the annual demand for an arbitrary ...

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