a. 1. Describe the four types of inventory.
2. With the advent of low-cost computing, do you see alternatives to the popular ABC classifications?
3. What is the purpose of the ABC classification system?
4. Identify and explain the types of costs that are involved in an inventory system.
5. Explain the major assumptions of the basic EOQ model.
b. 1. What is the relationship of the economic order quantity to demand? To the holding cost? To the setup cost?
2. Explain why it is not necessary to include product cost (price or price times quantity) in the EOQ model, but the quantity discount model requires this information.
3. What are the advantages of cycle counting?
4. What impact does a decrease in setup time have on EOQ?