Exam 15: Managing Service Inventory

Patients waiting for heart transplants are an example of an inventory model that has a backorder cost of zero.

Which item below would not be a good candidate for a planned shortage model?

Which one of the following is most affected by the bullwhip effect?

POS scanning is used to initiate a purchase order to a pre-approved vendor automatically when the stock levels are depleted (or reach a reorder point).

For the planned shortage model, when the cost of backorders approaches zero, the order quantity becomes undefined.

One role of holding inventory is to hedge against anticipated increases in the cost of the inventoried items.

Which one of the following is not a role that inventories play in a distribution system?

Forward buying is used to avoid expensive interruptions of service, as a stock out at any stage of the physical goods distribution system would have far-reaching consequences for the other stages.

Shelf life can be a constraint on the amount of inventory held.

Which one of the following is most important for a continuous review system?

Radio Frequency Identification (RFID) is replacing bar coding.

For seasonal items a ______ system could be used to manage inventory.

In the critical fractile ratio, the numerator refers to the cost of overestimating demand.

Dependent demand is described by a probability distribution.

Point-of-sale scanning became feasible only when industry agreed upon a universal system of bar coding.

The central idea in the retail-discounting model is that:

The total inventory for a retailer is comprised of in-transit inventory, safety stock, and __________ inventory.

In the design of an inventory system all but one of the following is considered:

ABC analysis is an application of the 80-20 rule.

In the ABC inventory classification, C items can best be described as: