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### 19 Cards in this Set

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 What is inventory turnover? Ratio of average cost of goods sold to average inventory investment. What is a periodic system? Physical count of items in inventory made at periodic intervals. What is a perpetual inventory system? System that keeps track of removals from inventory continuously, thus monitoring current levels of each item. What is a two-bin system? Two containers of inventory; reorder whent eh first is empty. What is a universal product code? Bar code printed on a label that has informationa bout the item to which it is attached. What is lead time? Time interval between ordering and receiving the order. What is a point of sale (POS) system? Method for electronically tracking sales and inventory. What is holding(carrying) cost? Cost to carry an item in inventory for a length of time, usually a year. What is ordering costs? Costs of ordering and receiving inventory. What is shortage costs? Costs resulting when demand exceeds the supply of inventory on hand; oft\etn unrealized profit per unit. What is cycle counting? A physical count of items in inventory. What is EOQ? Economic order quantity is the order size that minimizes total cost. What is quantity discounts? Price reductions for large orders. What is safety stock? Stock that is held in excess of expected demand due to variable demand rate. What is service level? Probability that demand will not exceed supply during lead time. What is fixed-order-interval (FOI) model? Orders are placed at fixed time intervals. What is single-period model? Model for ordering of perishablees and other items with limited useful lives. What is the shortage cost? Generally, the unrealized profit per unit. What is the excess cost? Differences between purchase cost and salvage value of items left over at the end of the period.