Question 1

Which of the following statements is true of a fixed-period system (FPS)?

Accepted Answer

A)  It orders a fixed quantity of items when the inventory position reaches or drops below the reorder point (r). 
B)  It orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M). 
C)  It maintains a constant order quantity every review period. 
D)  It checks the inventory position on a continuous basis. 
A)  It orders a fixed quantity of items when the inventory position reaches or drops below the reorder point (r). 
B)  It orders sufficient stock at the time of review to bring the inventory position up to the replenishment level (M). 
C)  It maintains a constant order quantity every review period. 
D)  It checks the inventory position on a continuous basis.

Question 2

Setup costs include costs associated with maintaining storage facilities,such as gas and electricity,taxes,and insurance.

Accepted Answer

A) True 
 B)False

Question 3

In the context of ABC inventory analysis,which of the following statements is true of class A items?

Accepted Answer

A)  They require close control by operations managers. 
B)  They comprise less than 30 percent of the total dollar usage. 
C)  They can be managed using automated computer systems. 
D)  They account for more than 50 percent of inventory items. 
A)  They require close control by operations managers. 
B)  They comprise less than 30 percent of the total dollar usage. 
C)  They can be managed using automated computer systems. 
D)  They account for more than 50 percent of inventory items.

Question 4

In the context of fixed-quantity systems,_____ is defined as the on-hand quantity (OH)plus any orders placed but which have not arrived minus any backorders (BO).

Accepted Answer

A)  inventory position 
B)  the reorder point 
C)  a stock-keeping unit 
D)  work-in-process inventory 
A)  inventory position 
B)  the reorder point 
C)  a stock-keeping unit 
D)  work-in-process inventory

Question 5

_____ inventory consists of partially completed products in various stages of completion that are awaiting further processing.

Accepted Answer

A)  Raw materials 
B)  Work-in-process 
C)  Finished-goods 
D)  Safety stock 
A)  Raw materials 
B)  Work-in-process 
C)  Finished-goods 
D)  Safety stock

Question 6

Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)?

Accepted Answer

A)  It needs to be calculated using the forecast of dependent demand. 
B)  It is affected by the demand of other SKUs. 
C)  It is directly related to the demand of raw materials. 
D)  It needs to be forecasted. 
A)  It needs to be calculated using the forecast of dependent demand. 
B)  It is affected by the demand of other SKUs. 
C)  It is directly related to the demand of raw materials. 
D)  It needs to be forecasted.

Question 7

_____ applies to inventory situations in which one order is placed for a good in anticipation of a future selling season where demand is uncertain.

Accepted Answer

A)  A fixed-period inventory system 
B)  A fixed-quantity inventory system 
C)  The deliver-lag inventory model 
D)  The single-period inventory model 
A)  A fixed-period inventory system 
B)  A fixed-quantity inventory system 
C)  The deliver-lag inventory model 
D)  The single-period inventory model

Question 8

In the context of ABC inventory analysis,which of the following statements is true of class C items?

Accepted Answer

A)  They require close control by operations managers. 
B)  They comprise more than 80 percent of the total dollar usage. 
C)  They can be managed using automated computer systems. 
D)  They make up less than 10 percent of inventory items. 
A)  They require close control by operations managers. 
B)  They comprise more than 80 percent of the total dollar usage. 
C)  They can be managed using automated computer systems. 
D)  They make up less than 10 percent of inventory items.

Question 9

Jae's Shoes is considering a change of their current inventory control system for sneakers.The information regarding the neckties is: Demand = 1000 pairs/week; Lead time = 3 weeks; Order cost = $20/order; Holding cost = $10.00/pair/yr; Cycle service level = 95%; Standard deviation of weekly demand = 48; and Number of weeks per year = 52.To calculate the relative frequency use the following values: _____.

Accepted Answer

A)  Number of Days and Standard Deviation of Weekly Demand 
B)  Units Sold and Demand 
C)  Units Sold and Number of Days 
D)  Lead Time and Holding Cost 
A)  Number of Days and Standard Deviation of Weekly Demand 
B)  Units Sold and Demand 
C)  Units Sold and Number of Days 
D)  Lead Time and Holding Cost

Question 10

_____ inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.

Accepted Answer

A)  Finished-goods 
B)  Stockout 
C)  Cycle 
D)  Work-in-process 
A)  Finished-goods 
B)  Stockout 
C)  Cycle 
D)  Work-in-process

Question 11

A buyer for a department store orders sweaters about 6 months before the winter season.The store plans to hold a March clearance sale to sell any surplus goods by February 29.Each piece costs $100 per pair and sells for $120 per pair.At the sale price of $60 per pair,it is expected that any remaining stock can be sold during the March sale.Assume that a uniform probability distribution ranging from 250 to 450 items describes the demand.The expected demand is 300.In the context of the single period inventory system,the optimal order size Q must satisfy the condition _____.

Accepted Answer

A)  P(demand ≤ Q*)= 1/2 
B)  P(demand ≤ Q*)= 1/3 
C)  P(demand ≤ Q*)= 1/4 
D)  P(demand ≤ Q*)= 1/5 
A)  P(demand ≤ Q*)= 1/2 
B)  P(demand ≤ Q*)= 1/3 
C)  P(demand ≤ Q*)= 1/4 
D)  P(demand ≤ Q*)= 1/5

Question 12

Jae's Shoes is considering a change of their current inventory control system for sneakers.The information regarding the neckties is: Demand = 1000 pairs/week; Lead time = 3 weeks; Order cost = $20/order; Holding cost = $10.00/pair/yr; Cycle service level = 95%; Standard deviation of weekly demand = 48; and Number of weeks per year = 52.To calculate the relative frequency use the following values: _____.

Accepted Answer

A)  Number of Days and Standard Deviation of Weekly Demand 
B)  Units Sold and Demand 
C)  Units Sold and Number of Days 
D)  Lead Time and Holding Cost 
A)  Number of Days and Standard Deviation of Weekly Demand 
B)  Units Sold and Demand 
C)  Units Sold and Number of Days 
D)  Lead Time and Holding Cost

Question 13

In the context of inventory costs,_____ costs can reflect backorders or service interruptions for external customers.

Accepted Answer

A)  holding 
B)  stockout 
C)  ordering 
D)  setup 
A)  holding 
B)  stockout 
C)  ordering 
D)  setup

Question 14

Based on the constant demand assumption in the economic order quantity (EOQ)model,the average cycle inventory is:

Accepted Answer

A)  the order quantity divided by the number of inventory cycles per year. 
B)  the annual demand divided by the number of inventory cycles per year. 
C)  half of the order quantity. 
D)  half of the annual usage. 
A)  the order quantity divided by the number of inventory cycles per year. 
B)  the annual demand divided by the number of inventory cycles per year. 
C)  half of the order quantity. 
D)  half of the annual usage.

Which of the following statements is true of a fixed-period system (FPS)?

Setup costs include costs associated with maintaining storage facilities,such as gas and electricity,taxes,and insurance.

In the context of ABC inventory analysis,which of the following statements is true of class A items?

In the context of fixed-quantity systems,_____ is defined as the on-hand quantity (OH)plus any orders placed but which have not arrived minus any backorders (BO).

_____ inventory consists of partially completed products in various stages of completion that are awaiting further processing.

Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)?

_____ applies to inventory situations in which one order is placed for a good in anticipation of a future selling season where demand is uncertain.

In the context of ABC inventory analysis,which of the following statements is true of class C items?

_____ inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.

In the context of inventory costs,_____ costs can reflect backorders or service interruptions for external customers.

Based on the constant demand assumption in the economic order quantity (EOQ)model,the average cycle inventory is:

Operations Management and Value Chains

Measuring Performance in Operations and Value Chains

Operations Strategy

Technology and Operations Management

Goods and Service Design

Supply Chain Design

Process Selection,design,and Improvement

Facility and Work Design

Forecasting and Demand Planning

Capacity Management

Process Analysis and Resource Utilization

Supply Chain Management and Logistics

Resource Management

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Exam 12: Managing Inventories in Supply Chains

Which of the following statements is true of a fixed-period system (FPS)?

Setup costs include costs associated with maintaining storage facilities,such as gas and electricity,taxes,and insurance.

In the context of ABC inventory analysis,which of the following statements is true of class A items?

In the context of fixed-quantity systems,_____ is defined as the on-hand quantity (OH)plus any orders placed but which have not arrived minus any backorders (BO).

_____ inventory consists of partially completed products in various stages of completion that are awaiting further processing.

Which of the following statements is true of the independent demand for a stock-keeping unit (SKU)?

_____ applies to inventory situations in which one order is placed for a good in anticipation of a future selling season where demand is uncertain.

In the context of ABC inventory analysis,which of the following statements is true of class C items?

_____ inventory is inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.

In the context of inventory costs,_____ costs can reflect backorders or service interruptions for external customers.

Based on the constant demand assumption in the economic order quantity (EOQ)model,the average cycle inventory is:

Operations Management and Value Chains

Measuring Performance in Operations and Value Chains

Operations Strategy

Technology and Operations Management

Goods and Service Design

Supply Chain Design

Process Selection,design,and Improvement

Facility and Work Design

Forecasting and Demand Planning

Capacity Management

Process Analysis and Resource Utilization

Supply Chain Management and Logistics

Resource Management

Operations Scheduling and Sequencing

Quality Management

Quality Control Spc

Lean Operating Systems

Project Management

Filters