True/False

________ Your supplier’s supplier is a third tier supplier.

________ A high-end, customized furniture manufacturer, would most likely employ an assembly-line type of process.

________ Under the assumptions of the Basic EOQ model, if one increases the order quantity, then the length of the order cycle decreases (with demand and cost parameters remaining the same).

________ The bottleneck time is always at least as long as the throughput time.

Multiple choice

The purpose of safety stock is to

a. Protect the firm from a sudden decrease in demand

b. Replace failed units with good ones

c. Eliminate the possibility of a stock-out

d. Control the likelihood of a stock-out due to the variability of demand during lead time

e. Eliminate the likelihood of a stock-out due to erroneous inventory tally