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NEW QUESTION 30
In inventory management, the cost of insurance and taxes are included in which group?

A. Set up costsB. Inventory carrying costC. Acquisition costsD. Costs of shortage

Answer: B

Explanation:
Direct and indirect costs of holding inventory include the following:
1. Acquisition costs
2. Holding costs (carrying costs) are the costs associated with the storage and handling of physical stock. There are two different types of holding costs:
a. Costs related to the value of the goods: financial costs (i.e. the interest on the working capital tied up in inventory, which may be the bank borrowing rate or the company's target for return on capital); cost of insurance; losses due to product deterioration; losses due to obsolescence and redundancy of inventory; losses due to theft, accidental damage etc.
b. Costs related to the physical characteristics of the inventory include the following: storage space; power, heat and lighting of the store; movement equipment; labour costs; administration costs.
3. Costs of stockouts
Reference:
LO 2, AC 2.2

 

NEW QUESTION 31
Which is the best definition of reorder point?

A. The level inventory at which an order must be madeB. The point when stock reaches zeroC. The point when one unit of stock remains in stockD. The point at which stock will fall to zero minus lead-time

Answer: A

Explanation:
Reorder point is the point either in time or in a process when the next order should be placed.
Reference:
LO 2, AC 2.3

 

NEW QUESTION 32
Which type of codes can a barcode laser scanner (linear scanner) read?

A. Numerical codeB. QR codeC. 1D barcodeD. Aztec code

Answer: C

Explanation:
One-dimensional (or 1D) barcodes systematically represent data by varying the widths and spac-ings of parallel lines. These include some of the most traditional and well-recognized barcode types, such as the UPC and EAN codes. 1D barcodes are also commonly referred to as linear barcodes.
Two-dimensional (2D) barcodes look like squares or rectangles that contain many small, individual dots. QR codes, Data matrix and Aztec codes are examples of 2D barcodes Numerical code contains all numbers, no letters There are two different scan engine types (laser scanner versus imager) for interpreting the infor-mation provided in the barcode. Many companies producing the technology capable of reading the barcode data uses the term "scanning" regardless of the type of scan engine used. For the purposes of these FAQs, we are trying to draw a clearer distinction for you.
Linear (1D) codes can be scanned with a traditional laser scanner. A laser scan engine uses a laser and mirror to create the bar that scans the information. 1D barcode scanners will only interpret the linear barcode scanning technology. 1D barcode scanners are typically less expensive since the type of encryptions they can decode is limited.

LO 1, AC 1.2

 

NEW QUESTION 33
A supplier delivers large quantities of inventory to its customer's store, but only charges for the goods as and when they are used. This can be described as...?

A. Consignment stockB. Multi-stage inventoryC. Multi-echelon stockD. Components inventory

Answer: A

Explanation:
Consignment stock is stock legally owned by one party, but held by another, meaning that the risk and rewards regarding to the said stock remains with the first party while the second party is re-sponsible for distribution or retail operations. Ownership of consignment stock is passed only when the stock is used (issued or sold in the case of a shop). Unused stock in a warehouse may be returned to the supplier when it concerns standard manufactured products. With customer specific items, agreements concerning returning products, should be negotiated.
Reference:
LO 1, AC 1.1

 

NEW QUESTION 34
Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory belongs to which of the following?

A. Holding costsB. Costs of stockoutsC. Acquisition costsD. Purchase price

Answer: A

Explanation:
Direct and indirect costs of holding inventory include the following:
- Acquisition costs
- Holding costs: There are 2 different types of holding costs: costs related to the value of the goods (including opportunity costs, costs of insurance, losses due to product deterioration, etc) and costs related to the physical characteristics of this inventory.
- Costs of stockouts
Reference:
LO 2, AC 2.2

 

NEW QUESTION 35
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