Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Which of the following would NOT generally be a motive for a firm to hold inventories? 1) _____ A) to minimize holding costs B) to take advantage of quantity discounts C) to decouple various parts of the production process D) to hedge against inflation E) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand 2) Which of the following is NOT one of the four main types of inventory? A) work-in-process inventory B) finished-goods inventory C) raw material inventory D) safety stock inventory E) maintenance/repair/operating supply inventory 3) Which of the following is a function of inventory? A) to take advantage of quantity discounts B) to hedge against inflation C) to decouple various parts of the production process D) to provide a selection of goods for anticipated customer demand and to separate the firm from fluctuations in that demand E) All of the above are functions of inventory. 4) Which of the following statements about ABC analysis is FALSE? A) In ABC analysis, forecasting methods for "C" items may be less sophisticated than for "A" items. B) Criteria other than annual dollar volume, such as high holding cost or delivery problems, can determine item classification in ABC analysis. C) ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings. D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings. E) In ABC analysis, "A" items should have tighter physical inventory control than "B" or "C" items have. 5) Cycle counting: A) eliminates annual inventory adjustments. B) assumes that all inventory records must be