Question 1

In the ABC inventory classification approach, approximately _______ percent of a firm's items are in Class A.

Accepted Answer

20

Question 2

In an EOQ model with variable demand, stockouts cannot occur.

Accepted Answer

A) True 
 B)False  False

Question 3

Describe how safety stock levels can be reduced in a supply chain.

Accepted Answer

A successful answer will note that the use of collaborative planning, forecasting, and replenishment can reduce uncertainty in a supply chain, thereby negating the need for safety stock.

Question 4

Flanders Bar and Grill orders cleaning supply kits using the EOQ model. The restaurant estimates that it uses 525 kits per year. The purchase price per kit is $12 with an estimated carrying cost rate of 15%. The cost to place an order from the kit supplier is $10. What is the average inventory level that the restaurant should expect?

Accepted Answer

A)  212.5 
B)  76.4 
C)  525 
D)  38.2 
A)  212.5 
B)  76.4 
C)  525 
D)  38.2

Question 5

The optimal order quantity for the EOQ model is found where the annual ordering and carrying costs are equal.

Accepted Answer

A) True 
 B)False

Question 6

The ABC inventory classification approach is used for?

Accepted Answer

A)  Dependent demand inventory 
B)  Independent demand inventory 
C)  Both dependent and independent demand inventory 
D)  Neither dependent nor independent demand inventory 
A)  Dependent demand inventory 
B)  Independent demand inventory 
C)  Both dependent and independent demand inventory 
D)  Neither dependent nor independent demand inventory

Question 7

A measure of how long it takes a company to pay its creditors is?

Accepted Answer

A)  Inventory days of supply 
B)  Days of receivables outstanding 
C)  Days payable outstanding 
D)  Cash-to-Cash Cycle Time 
A)  Inventory days of supply 
B)  Days of receivables outstanding 
C)  Days payable outstanding 
D)  Cash-to-Cash Cycle Time

Question 8

In the EOQ model, the order quantity is?

Accepted Answer

A)  d/2 
B)  d 
C)  Q/2 
D)  Q 
A)  d/2 
B)  d 
C)  Q/2 
D)  Q

Question 9

Internal demand for a firm's finished products is?

Accepted Answer

A)  Independent demand 
B)  Dependent demand 
C)  Both independent and dependent demand 
D)  Neither independent nor dependent demand 
A)  Independent demand 
B)  Dependent demand 
C)  Both independent and dependent demand 
D)  Neither independent nor dependent demand

Question 10

A "normal" value for days of receivables outstanding might be?

Accepted Answer

A)  0 
B)  10 
C)  45 
D)  150 
A)  0 
B)  10 
C)  45 
D)  150

Question 11

Oil that is on an oil tanker that is in transit to a customer would be viewed as what type of inventory function?

Accepted Answer

A)  Cycle 
B)  Hedge 
C)  Safety stocks 
D)  Transportation 
A)  Cycle 
B)  Hedge 
C)  Safety stocks 
D)  Transportation

Question 12

Wheat and other ingredients used to make bread would be considered what type of inventory?

Accepted Answer

A)  Raw material 
B)  Work-in-process 
C)  MRO 
D)  Finished goods 
A)  Raw material 
B)  Work-in-process 
C)  MRO 
D)  Finished goods

Question 13

Opportunity costs incurred by having capital tied up in inventory are typically referred to as order costs.

Accepted Answer

A) True 
 B)False

Question 14

The actual cost of items bought from a supplier is referred to as the?

Accepted Answer

A)  Order cost 
B)  Stockout cost 
C)  Inventory carrying cost 
D)  Purchase cost 
A)  Order cost 
B)  Stockout cost 
C)  Inventory carrying cost 
D)  Purchase cost

Question 15

___________ can be variable when a quantity discount is offered.

Accepted Answer

The answer of ___________ can be variable when a quantity...

Question 16

An example of a dependent demand item would be?

Accepted Answer

A)  Bicycle seat 
B)  Bicycle 
C)  Both a bicycle seat and a bicycle 
D)  Neither a bicycle seat nor a bicycle 
A)  Bicycle seat 
B)  Bicycle 
C)  Both a bicycle seat and a bicycle 
D)  Neither a bicycle seat nor a bicycle

Question 17

In the EOQ model, the annual number of orders is given by?

Accepted Answer

A)  Q/2 
B)  D/Q 
C)  Q/D 
D)  2Q 
A)  Q/2 
B)  D/Q 
C)  Q/D 
D)  2Q

Question 18

The EOQ model assumes that each purchase order arrives?

Accepted Answer

A)  In a single delivery 
B)  Spread across multiple deliveries 
C)  In a single delivery or spread across multiple deliveries 
D)  In each exactly two deliveries 
A)  In a single delivery 
B)  Spread across multiple deliveries 
C)  In a single delivery or spread across multiple deliveries 
D)  In each exactly two deliveries

Question 19

Average retail stockout rates are approximately?

Accepted Answer

A)  2% 
B)  8% 
C)  15% 
D)  20% 
A)  2% 
B)  8% 
C)  15% 
D)  20%

Question 20

The minimum inventory level experienced in the EOQ model is?

Accepted Answer

A)  0 
B)  Q/2 
C)  Q 
D)  2Q 
A)  0 
B)  Q/2 
C)  Q 
D)  2Q

In the ABC inventory classification approach, approximately _______ percent of a firm's items are in Class A.

In an EOQ model with variable demand, stockouts cannot occur.

Describe how safety stock levels can be reduced in a supply chain.

The optimal order quantity for the EOQ model is found where the annual ordering and carrying costs are equal.

The ABC inventory classification approach is used for?

A measure of how long it takes a company to pay its creditors is?

In the EOQ model, the order quantity is?

Internal demand for a firm's finished products is?

A "normal" value for days of receivables outstanding might be?

Oil that is on an oil tanker that is in transit to a customer would be viewed as what type of inventory function?

Wheat and other ingredients used to make bread would be considered what type of inventory?

Opportunity costs incurred by having capital tied up in inventory are typically referred to as order costs.

The actual cost of items bought from a supplier is referred to as the?

___________ can be variable when a quantity discount is offered.

An example of a dependent demand item would be?

In the EOQ model, the annual number of orders is given by?

The EOQ model assumes that each purchase order arrives?

Average retail stockout rates are approximately?

The minimum inventory level experienced in the EOQ model is?

Operations Management, Processes, and Supply Chain Management

Corporate Strategy, Performance, and Sustainability

Product Design and Development

Process Design and Capacity Management

Customer Relationships and Customer Service

Demand Management, Forecasting, and Aggregate Planning

Material Flow Analysis and Facility Layouts

Supplement: Job Scheduling and Vehicle Routing

Lean Systems

Managing Customer and Work Flows

Managing Information Flowsmrp and Erp

Managing Projects

Six Sigma Quality Management

Supplement: Statistical Quality Control

Global Supply Management

Location, Logistics, and Product Returns

Integrating Processes Along the Supply Chain

Filters

Exam 7: Independent Demand Inventory Management

In the ABC inventory classification approach, approximately _______ percent of a firm's items are in Class A.

In an EOQ model with variable demand, stockouts cannot occur.

Describe how safety stock levels can be reduced in a supply chain.

The optimal order quantity for the EOQ model is found where the annual ordering and carrying costs are equal.

The ABC inventory classification approach is used for?

A measure of how long it takes a company to pay its creditors is?

In the EOQ model, the order quantity is?

Internal demand for a firm's finished products is?

A "normal" value for days of receivables outstanding might be?

Oil that is on an oil tanker that is in transit to a customer would be viewed as what type of inventory function?

Wheat and other ingredients used to make bread would be considered what type of inventory?

Opportunity costs incurred by having capital tied up in inventory are typically referred to as order costs.

The actual cost of items bought from a supplier is referred to as the?

___________ can be variable when a quantity discount is offered.

An example of a dependent demand item would be?

In the EOQ model, the annual number of orders is given by?

The EOQ model assumes that each purchase order arrives?

Average retail stockout rates are approximately?

The minimum inventory level experienced in the EOQ model is?

Operations Management, Processes, and Supply Chain Management

Corporate Strategy, Performance, and Sustainability

Product Design and Development

Process Design and Capacity Management

Customer Relationships and Customer Service

Demand Management, Forecasting, and Aggregate Planning

Material Flow Analysis and Facility Layouts

Supplement: Job Scheduling and Vehicle Routing

Lean Systems

Managing Customer and Work Flows

Managing Information Flowsmrp and Erp

Managing Projects

Six Sigma Quality Management

Supplement: Statistical Quality Control

Global Supply Management

Location, Logistics, and Product Returns

Integrating Processes Along the Supply Chain

Filters