1561. In ABC inventory management system , Class A items may require_______.

A. Higher safety stock *
B. Frequent Deliveries
C. Periodic inventory system
D. Updating of inventory records

1562. Inventory holding cost may include _________.

A. Material Purchase cost
B. Penalty charge for default
C. Interest on Loan
D. None of the above *

1563. Use of safety stock by a firm would _________.

A. Increase inventory cost *
B. Decrease inventory cost
C. No effect on cost
D. None of the above

1564. Which of the following is true for a company which uses continuous review inventory system_______.

A. Order Interval is fixed
B. Order Interval varies *
C. Order quantity is fixed
D. Both A and C

1565. EOQ determines the order size when _________.

A. Total order cost is minimum
B. Total number of order is least
C. Total inventory costs are minimum *
D. None of the above

1566. ABC analysis is useful for analyzing the inventories ________.

A. Based on their quality
B. Based on their usage and value *
C. Based on physical volume
D. All of the above

1567. If A= Annual requirement, O = order cost and C = Carrying cost per unit per annum, then EOQ _____.

A. (2AO/C)2
B. 2AO/C *
C. 2A/OC

1568. Inventory is generally valued as lower of ___________.

A. Market price and replacement cost
B. Cost and Net realizable value *
C. Cost and sales value
D. Sales value and profit

1569. Which of the following is not included in cost of inventory ?

A. Purchase cost
B. Transport in cost
C. Import duty
D. Selling costs *

1570. Cost of not carrying sufficient inventory is knowns as _______.

A. Carrying cost
B. Holding cost
C. Total cost
D. Stock-out cost *