Practice Quiz

FSOT: 500 Test Prep Study Questions - Question List

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66. Which of the following reasons for holding any inventory is most important?
  1. To deal with uncertainty in supply and demand
  2. To improve the organization's balance sheet
  3. To use up excess budget funds at the close of a fiscal year
  4. To better your position with suppliers by buying more from them
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67. The most commonly included factor used to calculate the cost of carrying inventory is
  1. personnel costs
  2. cost of the product
  3. order processing cost
  4. interest rate of money
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68. The Byrd Amendment was found in violation of international trade law by a World Trade Organization (WTO) dispute settlement panel because the amendment provided that:
  1. safeguards to protect U.S. steel from imports could be extended beyond the WTO limit if certain countries granted extraordinary subsidies to their steel industries
  2. he U.S. could grant subsidies to its steel industry in excess of WTO limits to meet the competition from state-owned foreign steel industries that were not run for profit
  3. dumping margins would be calculated by the U.S. Department of Commerce and would not be subject to WTO review
  4. dumping duties collected on U.S. imports would be distributed to the injured companies
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69. Which of the following costs is included in the carrying cost of supplies inventory?
  1. Purchase price
  2. Cost of money
  3. Labor costs
  4. Transportation costs
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70. A system in which goods are replaced as they are used by means of a card (or other signaling device) that travels with the goods and is sent back to the supplier when the goods are consumed as automatic authorization to replace what was used is known as
  1. Kanban
  2. Supplier-Managed Inventory
  3. A Purchasing Card
  4. Material Requirements Planning
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