| 46. | Which of the following is an example of purchasing costs? |
| a. | incoming freight |
| b. | storage costs |
| c. | insurance |
| d. | spoilage |
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Answer: (c).insurance
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| 47. | If an average inventory is 2000 units, annual relevant carrying cost of each unit is $5, then the annual relevant carrying cost will be |
| a. | $5,000 |
| b. | $4,500 |
| c. | $5,500 |
| d. | $6,000 |
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Answer: (a).$5,000
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| 48. | If the demand of one year is 25000 units, relevant ordering cost for each purchase order is $210, carrying cost of one unit of stock is $25 then the economic order quantity will be |
| a. | 678 packages |
| b. | 648 packages |
| c. | 658 packages |
| d. | 668 packages |
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Answer: (b).648 packages
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| 49. | The cost of product failure, error prevention and appraisals can be classified under |
| a. | stocking costs |
| b. | stock-out costs |
| c. | costs of quality |
| d. | shrinkage costs |
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Answer: (c).costs of quality
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| 50. | The activities related to coordinating, controlling and planning flow of inventory are classified as |
| a. | decisional management |
| b. | throughput management |
| c. | inventory management |
| d. | manufacturing management |
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Answer: (c).inventory management
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