Exam 7: Inventory Management

The ABC inventory matrix shows an ABC inventory classification based on annual usage on the vertical axis and an ABC inventory classification based on physical inventory on the horizontal axis.

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Question 1

Correct Answer:

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True

The EOQ,also known as the economic order quantity,is the optimal order size in terms of cost because it minimizes the annual total inventory cost.The EOQ is the lot size where inventory holding costs equal annual ordering costs.

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Question 2

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True

List four assumptions of the EOQ model.

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Question 3

Correct Answer:

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a.Demand must be known and constant
b.Delivery time must be known and constant
c.Replenishment is instantaneous
d.Price is constant/quantity discounts are not allowed
e.Holding cost is known and constant
f.Ordering cost is known and constant
g.Stockouts are not allowed

Pareto Analysis is an inventory model used to determine the optimal order size that minimizes total annual inventory costs.

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Question 4

Which of the following is NOT an assumption of the classic Economic Order Quantity (EOQ)?

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Question 5

Figure 7-1 Use the graph below to answer the question(s). -In the absence of demand and delivery lead time variation,if demand is eight per day and purchase lead time is four days,the reorder point is:

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Question 6

Use this information below to calculate the optimal order quantity: Annual demand for backpacks is 43,000 units The cost to place an order is $220 The per unit cost of the item is $60.00 The annual holding rate is 37.5% Choose the closest answer.

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Question 7

Companies hold a supply of inventory for all of the following reasons EXCEPT:

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Question 8

ABC Inventory Matrix Use the graph below to answer the question(s). -In the ABC Inventory Matrix,inventory in area Y suggests

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Question 9

Briefly describe the differences between dependent and independent demand.Provide examples of dependent and independent demand items for each of the following industries: automotive industry,personal computer industry,bicycle industry

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Question 10

The continuous review inventory system is more expensive to monitor compared to the periodic review inventory system.

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Question 11

What is Radio Frequency Identification (RFID)? Provide four examples or scenarios of how RFID can be used to aid in supply chain management.

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Question 12

Which of the following would most likely be considered a dependent demand item?

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Question 13

The four broad categories of inventory are raw materials,work-in-process,subassemblies,and finished goods.

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Question 14

Radio Frequency Identification (RFID)is considered an eventual replacement of bar code because of its ability to store huge amount of information to differentiate specific unit of good.

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Question 15

Figure 7-1 Use the graph below to answer the question(s). -Which of the following is TRUE in relation to Figure 7-1?

(Multiple Choice)

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Question 16

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

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Question 17

The total annual inventory cost is the sum of the annual purchase cost,the annual holding cost,the annual capacity cost,and the annual ordering cost.

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Question 18

Service parts sold to the repair shops are examples of dependent demand.

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Question 19

Name and briefly describe the four basic types of inventory.

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Question 20

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The ABC inventory matrix shows an ABC inventory classification based on annual usage on the vertical axis and an ABC inventory classification based on physical inventory on the horizontal axis.

The EOQ,also known as the economic order quantity,is the optimal order size in terms of cost because it minimizes the annual total inventory cost.The EOQ is the lot size where inventory holding costs equal annual ordering costs.

List four assumptions of the EOQ model.

Pareto Analysis is an inventory model used to determine the optimal order size that minimizes total annual inventory costs.

Which of the following is NOT an assumption of the classic Economic Order Quantity (EOQ)?

Figure 7-1 Use the graph below to answer the question(s). -In the absence of demand and delivery lead time variation,if demand is eight per day and purchase lead time is four days,the reorder point is:

Use this information below to calculate the optimal order quantity: Annual demand for backpacks is 43,000 units The cost to place an order is $220 The per unit cost of the item is $60.00 The annual holding rate is 37.5% Choose the closest answer.

Companies hold a supply of inventory for all of the following reasons EXCEPT:

ABC Inventory Matrix Use the graph below to answer the question(s). -In the ABC Inventory Matrix,inventory in area Y suggests

Briefly describe the differences between dependent and independent demand.Provide examples of dependent and independent demand items for each of the following industries: automotive industry,personal computer industry,bicycle industry

The continuous review inventory system is more expensive to monitor compared to the periodic review inventory system.

What is Radio Frequency Identification (RFID)? Provide four examples or scenarios of how RFID can be used to aid in supply chain management.

Which of the following would most likely be considered a dependent demand item?

The four broad categories of inventory are raw materials,work-in-process,subassemblies,and finished goods.

Radio Frequency Identification (RFID)is considered an eventual replacement of bar code because of its ability to store huge amount of information to differentiate specific unit of good.

Figure 7-1 Use the graph below to answer the question(s). -Which of the following is TRUE in relation to Figure 7-1?

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

The total annual inventory cost is the sum of the annual purchase cost,the annual holding cost,the annual capacity cost,and the annual ordering cost.

Service parts sold to the repair shops are examples of dependent demand.

Name and briefly describe the four basic types of inventory.

Introduction to Supply Chain Management

Purchasing Management

Creating and Managing Supplier Relationships

Ethical and Sustainable Sourcing

Demand Forecasting

Resource Planning Systems

Process Management: Lean and Six Sigma in the Supply Chain

Domestic U.S.and Global Logistics

Customer Relationship Management

Global Location Decisions

Service Response Logistics

Supply Chain Process Integration

Performance Measurement Along the Supply Chain

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