Answer the following statement(s) true (T) or false (F)

1. The time between placing orders is the lead time.
2. If the optimal production lot size decreases, average inventory increases.
3. If an item's per-unit backorder cost is greater than its per-unit holding cost, no intentional shortage should be planned.
4. It is logical to order an amount from the highest discount category when quantity discounts are available.
5. When there is probabilistic demand in a multiperiod model, the inventory level will not decrease smoothly and can fall below 0.


1. False
2. True
3. False
4. False
5. True

Business

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