Question 1

Usage of independent demand items is determined by the production schedule.

Accepted Answer

A) True 
 B)False  False

Question 2

Independent demand items are:

Accepted Answer

A)  derived demand. 
B)  determined directly by customer orders. 
C)  determined by the production schedule. 
D)  derived demand and determined directly by customer orders. 
E)  derived demand and determined by the production schedule. 
A)  derived demand. 
B)  determined directly by customer orders. 
C)  determined by the production schedule. 
D)  derived demand and determined directly by customer orders. 
E)  derived demand and determined by the production schedule. B

Question 3

In fixed-period inventory models, a fixed economic order quantity is ordered when the reorder point is reached.

Accepted Answer

A) True 
 B)False  False

Question 4

Kanban systems are most useful for low-volume parts used on an infrequent basis.

Accepted Answer

A) True 
 B)False

Question 5

Anticipation inventories are carried:

Accepted Answer

A)  to stock the distribution pipelines. 
B)  to cover a well-defined future need. 
C)  to permit activities on either side of a major process. 
D)  to protect against machine breakdown. 
E)  to protect against uncertainties in supply and demand. 
A)  to stock the distribution pipelines. 
B)  to cover a well-defined future need. 
C)  to permit activities on either side of a major process. 
D)  to protect against machine breakdown. 
E)  to protect against uncertainties in supply and demand.

Question 6

Stock-out costs may be higher in a buyer's market compared to a seller's market.

Accepted Answer

A) True 
 B)False

Question 7

The "bullwhip effect" is a term that refers to the buildup of inventory in a supply chain resulting from fluctuations in demand.

Accepted Answer

A) True 
 B)False

Question 8

JIT requires frequent deliveries of relatively small quantities in compliance with quality standards.

Accepted Answer

A) True 
 B)False

Question 9

Holding extra inventory to protect against a supply disruption from a supplier strike is an example of buffer inventory.

Accepted Answer

A) True 
 B)False

Question 10

Strategies for managing "C" items in ABC analysis are:

Accepted Answer

A)  review inventory levels frequently. 
B)  carrying inventories. 
C)  concentrating requirements with one or a few suppliers. 
D)  review inventory levels frequently and carrying inventories. 
E)  carrying inventories and concentrating requirements with one or a few suppliers. 
A)  review inventory levels frequently. 
B)  carrying inventories. 
C)  concentrating requirements with one or a few suppliers. 
D)  review inventory levels frequently and carrying inventories. 
E)  carrying inventories and concentrating requirements with one or a few suppliers.

Question 11

Closed-loop MRP:

Accepted Answer

A)  is a system which closes the loop between the supplier and the purchaser. 
B)  provides a feedback loop between capacity and the master production schedule. 
C)  requires a feedback loop between purchasing and accounting. 
D)  requires a check between the master production schedule and inventory. 
E)  allows a unit manager to sequence jobs done in that department. 
A)  is a system which closes the loop between the supplier and the purchaser. 
B)  provides a feedback loop between capacity and the master production schedule. 
C)  requires a feedback loop between purchasing and accounting. 
D)  requires a check between the master production schedule and inventory. 
E)  allows a unit manager to sequence jobs done in that department.

Question 12

For the supply function, time-based strategies that impact competitive advantage relate to cycle time reductions, and greater coordination of materials and information flows.

Accepted Answer

A) True 
 B)False

Question 13

Which statement is most accurate when deciding how much and when to buy?

Accepted Answer

A)  Balance price, volume, carrying cost, and the cost of stock-outs. 
B)  Use the forecast future demand, lead times, and prices to determine optimal order volume. 
C)  Determine the price premium to attain the desired order quantity. 
D)  Managers seldom make purchase decisions until they are absolutely sure of the volume required. 
E)  The costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy. 
A)  Balance price, volume, carrying cost, and the cost of stock-outs. 
B)  Use the forecast future demand, lead times, and prices to determine optimal order volume. 
C)  Determine the price premium to attain the desired order quantity. 
D)  Managers seldom make purchase decisions until they are absolutely sure of the volume required. 
E)  The costs of placing orders and holding inventory are so low they do not significantly affect the decision of how much to buy.

Question 14

MRP II is a business practice in which multiple trading partners agree to exchange knowledge and share risks to generate the most accurate forecast possible, and develop effective replenishment plans.

Accepted Answer

A) True 
 B)False

Question 15

Any cost associated with having, as opposed to not having, inventory is included in inventory carrying costs, including (1) capital costs, (2) inventory service costs, (3) storage space costs, and (4) inventory risk costs.

Accepted Answer

A) True 
 B)False

Question 16

The Delphi technique is a method of quantitative forecasting.

Accepted Answer

A) True 
 B)False

Question 17

On an annual requirement of 100 items spread evenly throughout the year, a purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $130. If the inventory carrying cost is 20 percent per year and assuming no ordering costs:

Accepted Answer

A)  buying 100 at a time will save the company $2,130 per year. 
B)  buying 100 at a time will save the company $2,260 per year. 
C)  buying 100 at a time will save the company $3,000 per year. 
D)  buying 10 at a time will save the company $1,000 per year. 
E)  buying 10 at a time will save the company $870 per year. 
A)  buying 100 at a time will save the company $2,130 per year. 
B)  buying 100 at a time will save the company $2,260 per year. 
C)  buying 100 at a time will save the company $3,000 per year. 
D)  buying 10 at a time will save the company $1,000 per year. 
E)  buying 10 at a time will save the company $870 per year.

Question 18

Ordering raw material from a supplier in full truck loads only is an example of decoupling inventory.

Accepted Answer

A) True 
 B)False

Question 19

Supply chain inventory management involves establishing operational design of the physical flow of goods and services, and managing information flows.

Accepted Answer

A) True 
 B)False

Question 20

Strategies for managing "A" items in ABC analysis are:

Accepted Answer

A)  minimizing inventories. 
B)  using procurement cards. 
C)  review inventory levels frequently. 
D)  minimizing inventories and review inventory levels frequently. 
E)  using procurement cards and review inventory levels frequently. 
A)  minimizing inventories. 
B)  using procurement cards. 
C)  review inventory levels frequently. 
D)  minimizing inventories and review inventory levels frequently. 
E)  using procurement cards and review inventory levels frequently.

Usage of independent demand items is determined by the production schedule.

Independent demand items are:

In fixed-period inventory models, a fixed economic order quantity is ordered when the reorder point is reached.

Kanban systems are most useful for low-volume parts used on an infrequent basis.

Anticipation inventories are carried:

Stock-out costs may be higher in a buyer's market compared to a seller's market.

The "bullwhip effect" is a term that refers to the buildup of inventory in a supply chain resulting from fluctuations in demand.

JIT requires frequent deliveries of relatively small quantities in compliance with quality standards.

Holding extra inventory to protect against a supply disruption from a supplier strike is an example of buffer inventory.

Strategies for managing "C" items in ABC analysis are:

Closed-loop MRP:

For the supply function, time-based strategies that impact competitive advantage relate to cycle time reductions, and greater coordination of materials and information flows.

Which statement is most accurate when deciding how much and when to buy?

MRP II is a business practice in which multiple trading partners agree to exchange knowledge and share risks to generate the most accurate forecast possible, and develop effective replenishment plans.

Any cost associated with having, as opposed to not having, inventory is included in inventory carrying costs, including (1) capital costs, (2) inventory service costs, (3) storage space costs, and (4) inventory risk costs.

The Delphi technique is a method of quantitative forecasting.

On an annual requirement of 100 items spread evenly throughout the year, a purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $130. If the inventory carrying cost is 20 percent per year and assuming no ordering costs:

Ordering raw material from a supplier in full truck loads only is an example of decoupling inventory.

Supply chain inventory management involves establishing operational design of the physical flow of goods and services, and managing information flows.

Strategies for managing "A" items in ABC analysis are:

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Make or Buy, Insourcing and Outsourcing

Need Identification and Specification

Quality

Delivery

Price

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters

Exam 8: Quantity and Inventory

Usage of independent demand items is determined by the production schedule.

Independent demand items are:

In fixed-period inventory models, a fixed economic order quantity is ordered when the reorder point is reached.

Kanban systems are most useful for low-volume parts used on an infrequent basis.

Anticipation inventories are carried:

Stock-out costs may be higher in a buyer's market compared to a seller's market.

The "bullwhip effect" is a term that refers to the buildup of inventory in a supply chain resulting from fluctuations in demand.

JIT requires frequent deliveries of relatively small quantities in compliance with quality standards.

Holding extra inventory to protect against a supply disruption from a supplier strike is an example of buffer inventory.

Strategies for managing "C" items in ABC analysis are:

Closed-loop MRP:

For the supply function, time-based strategies that impact competitive advantage relate to cycle time reductions, and greater coordination of materials and information flows.

Which statement is most accurate when deciding how much and when to buy?

MRP II is a business practice in which multiple trading partners agree to exchange knowledge and share risks to generate the most accurate forecast possible, and develop effective replenishment plans.

Any cost associated with having, as opposed to not having, inventory is included in inventory carrying costs, including (1) capital costs, (2) inventory service costs, (3) storage space costs, and (4) inventory risk costs.

The Delphi technique is a method of quantitative forecasting.

On an annual requirement of 100 items spread evenly throughout the year, a purchaser has an opportunity of buying all 100 units at a price of $100 each, or buying 10 units at a time at a price of $130. If the inventory carrying cost is 20 percent per year and assuming no ordering costs:

Ordering raw material from a supplier in full truck loads only is an example of decoupling inventory.

Supply chain inventory management involves establishing operational design of the physical flow of goods and services, and managing information flows.

Strategies for managing "A" items in ABC analysis are:

Purchasing and Supply Management

Supply Strategy

Supply Organization

Supply Processes and Technology

Make or Buy, Insourcing and Outsourcing

Need Identification and Specification

Quality

Delivery

Price

Cost Management

Supplier Selection

Supplier Evaluation and Supplier Relationships

Global Supply Management

Legal and Ethics

Other Supply Responsibilities

Supply Function Evaluation and Trends

Filters