Lot-For-Lot (LFL)

question 72

Multiple Choice

Lot-for-lot (LFL) :

• A) minimizes purchase or setup costs.
• B) maximizes the amount of inventory that need to be carried.
• C) ignores the cost associated with purchase orders.
• D) masks the true nature of dependent demand.

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Definitions:

Interval

A range of values between two points, often used in reference to scales in measurements.

True Zero Point

In measurement scales, a true zero point indicates the absence of the quantity being measured, allowing for ratios to be meaningfully calculated.

Interval Level Variables

Interval level variables are a type of quantitative data where the intervals between values are meaningful, but the data lack a true zero point, allowing for the measurement of difference but not ratio.

Ratio Level Variables

Variables that have a true zero point and can be compared in terms of multiples.