A perpetual inventory system uses a minimum quantity on hand to initiate purchase ordering procedures for restocking. In reviewing the appropriateness of the minimum quantity level established by the stores department, the internal auditor is least likely to consider
Answer(s): C
The basic economic order quantity EOQ) model is based on the following variables: demand, variable cost per purchase order, and variable unit carrying cost. Thus, minimum stocking levels do not affect the EOQ.
An organization must manage its flows of raw materials, components, finished goods, services, or information through intermediaries to ultimate consumers. These flows may occur across the functions in an organization's:
Answer(s): B
The supply chain consists of flows from sources of a) raw materials, b) components, c) finished goods, d) services, or e) information through intermediaries to ultimate consumers.These flows and the related activities may occur across the functions in an organization's value chain R&D, design, production, marketing, distribution, and customer service). These flours and the related activities also may occur across separate organizations.
The bullwhip, or whiplash, effect on inventories begins when retailers face uncertain demand from consumers caused by randomness in buying habits. It can be avoided by:
Answer(s): D
Sharing information about sales, inventory, pricing, advertising campaigns, and sales forecasts by all functions and organizations in the supply chain moderates demand uncertainty for all parties. The desired results are a) minimization of inventories held by suppliers, manufacturers, and retailers; b) avoidance of stackouts; c) fewer rush orders; and d) production as needed by retailers.
A desired result of the sharing of information by all functions and organizations in the supply chain is:
Answer(s): A
Which of the following are intermediaries between sellers and buyers?I). AgentII). BrokerIII). ConsigneeIV). Consumer
A distribution channel is a series of interdependent marketing institutions that facilitate the transfer of a product from producer seller) to consumer buyer). Intermediaries include merchant middlemen, agents, brokers, consignees, and facilitating intermediaries.
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