1. Indicate by a (+), (-), or (0) whether each of the following events would probably cause average annual inventories (the sum of the inventories held at the end of each month of the year divided by 12) to rise, fall, or be affected in an indeterminate manner:
2. "Every firm should use the EOQ model to determine the optimal level of inventory to maintain." Discuss the accuracy of this statement with respect to the form of the EOQ model presented in this chapter.