Question 1

Safety stock is ignored when computing the reorder point.

Accepted Answer

A) True 
 B)False  False

Question 2

Consider the material structure tree for item A below.If 10 units of A are needed,how many units of E are needed?

Accepted Answer

A) 60 
B) 6 
C) 240 
D) 24 
E) 480 
A) 60 
B) 6 
C) 240 
D) 24 
E) 480 C

Question 3

A company uses 1,500 per year of a certain subassembly that has an annual holding cost of $45 per unit.Each order placed costs $150.The company operates 300 days per year and it has found that an order must be placed with the supplier 6 working days before it can expect to receive that order.For this subassembly,find:
(a)the economic order quantity.
(b)the annual holding cost.
(c)the annual ordering cost.
(d)the reorder point.

Accepted Answer

(a)EOQ = 100
(b)annual holding cost = (100/2)(45)= 2250
(c)annual ordering cost = (1500/100)(150)= 2250
(d)ROP = 5(6)= 30 units

Question 4

The reorder point occurs during a stockout.

Accepted Answer

A) True 
 B)False

Question 5

Explain how inventory can act as a buffer in the production process.

Accepted Answer

Storing some invento

Question 6

A professional baseball organization chooses to sell game day programs.Demand for game day programs is normally distributed with a mean of 2,000 and standard deviation of 300.If the marginal loss is $1 and the marginal profit is $3,how many programs should the baseball organization print?

Accepted Answer

P = ML/(ML + MP)= 0.25.Z = 0.6

Question 7

The H.A.L.Computer Store sells a printer for $400.Demand for this is constant during the year,and annual demand is forecasted to be 1350 units.The holding cost is $20 per unit per year,while the cost of ordering is $90 per order.Currently,the company is ordering 12 times per year (92 units each time).There are 270 working days per year and the lead-time is 8 days.What should be the reorder point?

Accepted Answer

(1350/270)

Question 8

Which of the following does not have an impact on EOQ?

Accepted Answer

A) safety stock 
B) demand per unit time 
C) order cost 
D) holding cost 
E) None of the above 
A) safety stock 
B) demand per unit time 
C) order cost 
D) holding cost 
E) None of the above

Question 9

A structure tree of the components in a product,with a description and the quantity required to make each product is called a(n)

Accepted Answer

A) ERP system. 
B) MRP system. 
C) Master production schedule. 
D) Bill of Materials. 
E) Inventory Receipt. 
A) ERP system. 
B) MRP system. 
C) Master production schedule. 
D) Bill of Materials. 
E) Inventory Receipt.

Question 10

Anne Beck recently took over a beauty supply store.Her predecessor always ordered shampoo in quantities of 100 units.Anne is reevaluating this policy.Based on her analysis,the cost to place each order is $35 and the holding cost is $8 per shampoo bottle per year.The annual demand for this product is 2500 bottles.Should Anne change the current order policy and,if so,how much can she save?

Accepted Answer

Current inventory policy parameters:
D =

Question 11

In the decoupling function,some inventory may be stored between each production process to act as a buffer.

Accepted Answer

A) True 
 B)False

Question 12

Fresh First grocery store faces demand for freshly squeezed orange juice.The daily demand for freshly squeezed pomegranate juice ranges from 0 to 5 gallons.The grocery store offers the juice in a special 1 gallon bottle that will be discarded after a day.Each gallon costs $2 to make and is sold for $5.The daily demand for pomegranate juice varies according to the following distribution:   How many gallons of juice should the store make each day?

Accepted Answer

Since the rule is P ≥ 2/(2 + 3

Question 13

List three general categories of inventory.

Accepted Answer

raw material,work-in

Question 14

In a JIT system,inventory managers can uncover bottlenecks by introducing or removing which of the following?

Accepted Answer

A) C-kanbans 
B) P-kanbans 
C) E-kanbans 
D) T-kanbans 
E) I-kanbans 
A) C-kanbans 
B) P-kanbans 
C) E-kanbans 
D) T-kanbans 
E) I-kanbans

Question 15

ERP systems are expensive to buy and costly to customize.

Accepted Answer

A) True 
 B)False

Question 16

The economic order quantity helps one estimate the optimal number of units to purchase with each order.

Accepted Answer

A) True 
 B)False

Question 17

The demand during the lead-time is normally distributed with a mean of 40 and a standard deviation of 4.If they have calculated a reorder point of 46.60 units,what service level are they assuming?

Accepted Answer

A) 85 percent 
B) 90 percent 
C) 95 percent 
D) 97.5 percent 
E) None of the above 
A) 85 percent 
B) 90 percent 
C) 95 percent 
D) 97.5 percent 
E) None of the above

Question 18

Explain the basic difference(s)between the simple EOQ model and the production run model.

Accepted Answer

In the simple EOQ,inventory de

Question 19

We can usually determine an appropriate safety stock even if we are unable to accurately assess the actual cost of a stockout.

Accepted Answer

A) True 
 B)False

Question 20

Theft is one of the "ordering cost factors."

Accepted Answer

A) True 
 B)False

Safety stock is ignored when computing the reorder point.

Consider the material structure tree for item A below.If 10 units of A are needed,how many units of E are needed?

The reorder point occurs during a stockout.

Explain how inventory can act as a buffer in the production process.

A professional baseball organization chooses to sell game day programs.Demand for game day programs is normally distributed with a mean of 2,000 and standard deviation of 300.If the marginal loss is $1 and the marginal profit is $3,how many programs should the baseball organization print?

Which of the following does not have an impact on EOQ?

A structure tree of the components in a product,with a description and the quantity required to make each product is called a(n)

In the decoupling function,some inventory may be stored between each production process to act as a buffer.

List three general categories of inventory.

In a JIT system,inventory managers can uncover bottlenecks by introducing or removing which of the following?

ERP systems are expensive to buy and costly to customize.

The economic order quantity helps one estimate the optimal number of units to purchase with each order.

The demand during the lead-time is normally distributed with a mean of 40 and a standard deviation of 4.If they have calculated a reorder point of 46.60 units,what service level are they assuming?

Explain the basic difference(s)between the simple EOQ model and the production run model.

We can usually determine an appropriate safety stock even if we are unable to accurately assess the actual cost of a stockout.

Theft is one of the "ordering cost factors."

Introduction to Quantitative Analysis

Probability Concepts and Applications

Decision Analysis

Regression Models

Forecasting

Linear Programming Models: Graphical and Computer Methods

Linear Programming Applications

Transportation,assignment,and Network Models

Integer Programming,goal Programming,and Nonlinear Programming

Project Management

Waiting Lines and Queuing Theory Models

Simulation Modeling

Markov Analysis

Statistical Quality Control

Analytic Hierarchy Process

Dynamic Programming

Decision Theory and the Normal Distribution

Game Theory

Mathematical Tools: Determinants and Matrices

Calculus-Based Optimization

Linear Programming: The Simplex Method

Transportation, Assignment, and Network Algorithms

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Exam 6: Inventory Control Models

Safety stock is ignored when computing the reorder point.

Consider the material structure tree for item A below.If 10 units of A are needed,how many units of E are needed?

The reorder point occurs during a stockout.

Explain how inventory can act as a buffer in the production process.

A professional baseball organization chooses to sell game day programs.Demand for game day programs is normally distributed with a mean of 2,000 and standard deviation of 300.If the marginal loss is $1 and the marginal profit is $3,how many programs should the baseball organization print?

Which of the following does not have an impact on EOQ?

A structure tree of the components in a product,with a description and the quantity required to make each product is called a(n)

In the decoupling function,some inventory may be stored between each production process to act as a buffer.

List three general categories of inventory.

In a JIT system,inventory managers can uncover bottlenecks by introducing or removing which of the following?

ERP systems are expensive to buy and costly to customize.

The economic order quantity helps one estimate the optimal number of units to purchase with each order.

The demand during the lead-time is normally distributed with a mean of 40 and a standard deviation of 4.If they have calculated a reorder point of 46.60 units,what service level are they assuming?

Explain the basic difference(s)between the simple EOQ model and the production run model.

We can usually determine an appropriate safety stock even if we are unable to accurately assess the actual cost of a stockout.

Theft is one of the "ordering cost factors."

Introduction to Quantitative Analysis

Probability Concepts and Applications

Decision Analysis

Regression Models

Forecasting

Linear Programming Models: Graphical and Computer Methods

Linear Programming Applications

Transportation,assignment,and Network Models

Integer Programming,goal Programming,and Nonlinear Programming

Project Management

Waiting Lines and Queuing Theory Models

Simulation Modeling

Markov Analysis

Statistical Quality Control

Analytic Hierarchy Process

Dynamic Programming

Decision Theory and the Normal Distribution

Game Theory

Mathematical Tools: Determinants and Matrices

Calculus-Based Optimization

Linear Programming: The Simplex Method

Transportation, Assignment, and Network Algorithms

Filters