Explains carrying cost, market models, EOQ model, lead-time demand, and continuous review system.
1. True
Carrying cost includes various expenses such as interest, storage, handling, taxes, insurance, and shrinkage.
2. False
Market models are effective with complex relationships, not just simple deterministic ones.
3. True
Even small deviations from the optimal order quantity in EOQ model can incur significant costs.
4. True
Lead-time demand is determined by consumption rates multiplied by lead time.
5. False
In the continuous review system, the reorder point triggers ordering, not the inventory reaching the reorder quantity.
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