Which of These Statements About the Production Order Quantity Model

question 53

Multiple Choice

Which of these statements about the production order quantity model is FALSE?

• A)The production order quantity model is appropriate when the assumptions of the basic EOQ model are met,except that receipt is noninstantaneous.
• B)Because receipt is noninstantaneous,some units are used immediately and not stored in inventory.
• C)Average inventory is less than one-half of the production order quantity.
• D)All else equal,the smaller the ratio of demand rate to production rate,the larger is the production order quantity.
• E)None of the above is false.

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Definitions:

Reliability

The degree to which an assessment tool produces stable and consistent results over time.

Functional Authority

Functional authority refers to the rights that are granted to individuals or departments to make decisions and issue directives within their specific area of expertise.

Line Managers

Supervisors or managers who are directly responsible for overseeing the work of their subordinates and have a direct impact on day-to-day operations.

Staff Authority

Authority to advise, but not to direct, others.