Question 1

Which of the following IS NOT an example of CC?

Accepted Answer

A) Cost of obsolescence and loss 
B) Taxes 
C) Insurance 
D) All of the above 
A) Cost of obsolescence and loss 
B) Taxes 
C) Insurance 
D) All of the above D

Question 2

The EOQ is? (Round up to the nearest whole number. )

Accepted Answer

A) 566 pounds 
B) 164 pounds 
C) 163 pounds 
D) 26667 pounds 
A) 566 pounds 
B) 164 pounds 
C) 163 pounds 
D) 26667 pounds A

Question 3

Alpha Company places 10 orders per year with its supplier.Each order is for an amount exactly equal to the EOQ.Alpha's order cost has been determined to be $50 per order.Alpha carries no safety stock at all.What is Alpha's annual inventory carrying cost?

Accepted Answer

A) cannot be determined without further information 
B) $50 
C) $250 
D) $500 
A) cannot be determined without further information 
B) $50 
C) $250 
D) $500 D

Question 4

Suppose demand is 25 units a month and average inventory is 30 units and unit cost is $10.What is the annual inventory turnover?

Accepted Answer

A) 100 
B) 10 
C) .83333 
D) 83.333 
A) 100 
B) 10 
C) .83333 
D) 83.333

Question 5

Suppose management decides it wants to offer a 95% service level.That is,Cooper Company is willing to experience a stock-out probability of 5% during the order cycle.How much safety stock should be carried?

Accepted Answer

A) 33 units 
B) 35 units 
C) 46 units 
D) 25 units 
A) 33 units 
B) 35 units 
C) 46 units 
D) 25 units

Question 6

Jones Company has calculated that the EOQ for a particular item is 1,000 units.However,Jones does not have enough capital to order that many units each time,so it only orders 250 units at a time.This will result in:

Accepted Answer

A) Higher annual inventory carrying cost than ordering the EOQ quantity 
B) Lower annual inventory carrying cost than ordering the EOQ quantity 
C) Lower annual ordering cost than ordering the EOQ quantity 
D) Cannot be determined 
A) Higher annual inventory carrying cost than ordering the EOQ quantity 
B) Lower annual inventory carrying cost than ordering the EOQ quantity 
C) Lower annual ordering cost than ordering the EOQ quantity 
D) Cannot be determined

Question 7

What is the annual ordering cost (based on the rounded up number of orders)?

Accepted Answer

A) $150 
B) $175 
C) $200 
D) $250 
A) $150 
B) $175 
C) $200 
D) $250

Question 8

If average lead time went up from 10 to 15 days,what will happen to EOQ?

Accepted Answer

A) Increase of 200 units 
B) Decrease of 200 units. 
C) No change in EOQ 
D) Increase of 100 units 
A) Increase of 200 units 
B) Decrease of 200 units. 
C) No change in EOQ 
D) Increase of 100 units

Question 9

When calculating a Reorder Point (ROP),which of the following factors WOULD NOT affect the calculation?

Accepted Answer

A) Item's EOQ 
B) Delivery lead time. 
C) Demand during the delivery lead time. 
D) Standard deviation of demand during delivery lead time. 
A) Item's EOQ 
B) Delivery lead time. 
C) Demand during the delivery lead time. 
D) Standard deviation of demand during delivery lead time.

Question 10

Which of the following is included in the cost of carrying inventory?

Accepted Answer

A) Heating and lighting a warehouse 
B) inventory obsolescence 
C) material handling 
D) all of the above 
A) Heating and lighting a warehouse 
B) inventory obsolescence 
C) material handling 
D) all of the above

Question 11

How many units should RFC order each time?

Accepted Answer

A) 2000 
B) 200 
C) 100 
D) 400 
A) 2000 
B) 200 
C) 100 
D) 400

Question 12

What is the average inventory? (Round up to the nearest whole number. )

Accepted Answer

A) 1200 units 
B) 283 units 
C) 250 units 
D) 275 units 
A) 1200 units 
B) 283 units 
C) 250 units 
D) 275 units

Question 13

Given the information above about RAJ and LEE,which of the following is true?

Accepted Answer

A) both will have the same annual ordering cost 
B) both will have the same reorder point 
C) both will have the same inventory turnover 
D) all of the above are true 
A) both will have the same annual ordering cost 
B) both will have the same reorder point 
C) both will have the same inventory turnover 
D) all of the above are true

Question 14

Suppose you tell management at Cooper Company (in the above two questions)it should raise safety stock to the six sigma level.If Cooper decides to do this,it will incur an additional inventory carrying cost of approximately how much?

Accepted Answer

A) $2,160 
B) $234 
C) cannot be determined 
D) $1,566 
A) $2,160 
B) $234 
C) cannot be determined 
D) $1,566

Question 15

Safety stock exists for which of the following reasons?

Accepted Answer

A) To allow less expensive purchases by buying more 
B) To allow for transportation time 
C) To provide protection against the uncertainties of supply and demand 
D) None of the above 
A) To allow less expensive purchases by buying more 
B) To allow for transportation time 
C) To provide protection against the uncertainties of supply and demand 
D) None of the above

Question 16

A batch of Raisin Bran that has been made at Kellogg's,but not yet packaged in its final cereal box would be an example of ________ inventory.

Accepted Answer

A) Raw Material 
B) Work-in-process 
C) Finished Goods 
D) Maintenance,repair and operating supplies (MRO) 
A) Raw Material 
B) Work-in-process 
C) Finished Goods 
D) Maintenance,repair and operating supplies (MRO)

Question 17

Which of the following is true?

Accepted Answer

A) RAJs EOQ is higher than Lee's EOQ 
B) LEE's EOQ is higher than RAJ's EOQ 
C) both have the same EOQ 
A) RAJs EOQ is higher than Lee's EOQ 
B) LEE's EOQ is higher than RAJ's EOQ 
C) both have the same EOQ

Question 18

What is the inventory turnover?

Accepted Answer

A) 8.48 times 
B) 0.7 times 
C) 10.49 times 
D) 10.5 times 
A) 8.48 times 
B) 0.7 times 
C) 10.49 times 
D) 10.5 times

Question 19

What would average inventory be if RFC orders this quantity every time?

Accepted Answer

A) 100 
B) 200 
C) 1000 
D) 50 
A) 100 
B) 200 
C) 1000 
D) 50

Question 20

How much is the annual inventory carrying cost of the safety stock because of this decision?

Accepted Answer

A) $755 
B) $610 
C) $594 
D) $351 
A) $755 
B) $610 
C) $594 
D) $351

Which of the following IS NOT an example of CC?

The EOQ is? (Round up to the nearest whole number. )

Alpha Company places 10 orders per year with its supplier.Each order is for an amount exactly equal to the EOQ.Alpha's order cost has been determined to be $50 per order.Alpha carries no safety stock at all.What is Alpha's annual inventory carrying cost?

Suppose demand is 25 units a month and average inventory is 30 units and unit cost is $10.What is the annual inventory turnover?

Suppose management decides it wants to offer a 95% service level.That is,Cooper Company is willing to experience a stock-out probability of 5% during the order cycle.How much safety stock should be carried?

Jones Company has calculated that the EOQ for a particular item is 1,000 units.However,Jones does not have enough capital to order that many units each time,so it only orders 250 units at a time.This will result in:

What is the annual ordering cost (based on the rounded up number of orders)?

If average lead time went up from 10 to 15 days,what will happen to EOQ?

When calculating a Reorder Point (ROP),which of the following factors WOULD NOT affect the calculation?

Which of the following is included in the cost of carrying inventory?

How many units should RFC order each time?

What is the average inventory? (Round up to the nearest whole number. )

Given the information above about RAJ and LEE,which of the following is true?

Suppose you tell management at Cooper Company (in the above two questions)it should raise safety stock to the six sigma level.If Cooper decides to do this,it will incur an additional inventory carrying cost of approximately how much?

Safety stock exists for which of the following reasons?

A batch of Raisin Bran that has been made at Kellogg's,but not yet packaged in its final cereal box would be an example of ________ inventory.

Which of the following is true?

What is the inventory turnover?

What would average inventory be if RFC orders this quantity every time?

How much is the annual inventory carrying cost of the safety stock because of this decision?

21st-Century Supply Chains

Supply Chain Information Technology

Logistics

Customer Accommodation

Integrated Operations Planning

Procurement and Manufacturing

Transportation

Warehousing, materials Handling and Packaging

Global Supply Chain

Network Design

Relationship Management

Performance Management

Supply Chain Trends

Filters

Exam 7: Inventory

Which of the following IS NOT an example of CC?

The EOQ is? (Round up to the nearest whole number. )

Alpha Company places 10 orders per year with its supplier.Each order is for an amount exactly equal to the EOQ.Alpha's order cost has been determined to be $50 per order.Alpha carries no safety stock at all.What is Alpha's annual inventory carrying cost?

Suppose demand is 25 units a month and average inventory is 30 units and unit cost is $10.What is the annual inventory turnover?

Suppose management decides it wants to offer a 95% service level.That is,Cooper Company is willing to experience a stock-out probability of 5% during the order cycle.How much safety stock should be carried?

Jones Company has calculated that the EOQ for a particular item is 1,000 units.However,Jones does not have enough capital to order that many units each time,so it only orders 250 units at a time.This will result in:

What is the annual ordering cost (based on the rounded up number of orders)?

If average lead time went up from 10 to 15 days,what will happen to EOQ?

When calculating a Reorder Point (ROP),which of the following factors WOULD NOT affect the calculation?

Which of the following is included in the cost of carrying inventory?

How many units should RFC order each time?

What is the average inventory? (Round up to the nearest whole number. )

Given the information above about RAJ and LEE,which of the following is true?

Suppose you tell management at Cooper Company (in the above two questions)it should raise safety stock to the six sigma level.If Cooper decides to do this,it will incur an additional inventory carrying cost of approximately how much?

Safety stock exists for which of the following reasons?

A batch of Raisin Bran that has been made at Kellogg's,but not yet packaged in its final cereal box would be an example of ________ inventory.

Which of the following is true?

What is the inventory turnover?

What would average inventory be if RFC orders this quantity every time?

How much is the annual inventory carrying cost of the safety stock because of this decision?

21st-Century Supply Chains

Supply Chain Information Technology

Logistics

Customer Accommodation

Integrated Operations Planning

Procurement and Manufacturing

Transportation

Warehousing, materials Handling and Packaging

Global Supply Chain

Network Design

Relationship Management

Performance Management

Supply Chain Trends

Filters