1.Economies of scale in purchasing and ordering motivate a manager to

1.              Economies of scale in purchasing and ordering motivate a manager to

a.              Increase the lot size and cycle inventory.

b.              Decrease the lot size and cycle inventory.

c.               Eliminate inventory.

d.              Increase the lot size and reduce cycle inventory.

e.              None of the above

2.                         The total annual cost is the sum of annual material cost, annual order cost, and annual holding cost, and is given as

a.              TC = CD + (D/Q)S + (Q/2)hC.

b.              TC = CD + (Q/2)S + (D/Q)hC.

c.               TC = CDS + D/Q + (Q/2)hC.

d.              TC = Q/2 + (D/Q)S + (CD)hC.

e.              none of the above