Question 1

Choosing suppliers simply based on the lowest bid has become a popular approach.

Accepted Answer

A) True 
 B)False  False

Question 2

Briefly describe how to conduct the factor weighting approach to supplier evaluation.

Accepted Answer

The factor weighting technique simultaneously considers multiple supplier criteria. First a set of important selection criteria must be chosen. Then an importance weight must be assigned to each factor. These weights often sum to 100%. Then each potential supplier is scored on each selection criterion according to the same numerical scale . Finally, each supplier's weighted total score equals the sum over all selection criteria of the product of that supplier's score multiplied by the importance weight for that criterion. The supplier with the highest total scored is deemed most attractive.

Question 3

The reorder point is the inventory level at which action is taken to replenish the stocked item.

Accepted Answer

A) True 
 B)False  True

Question 4

A container of surgical equipment valued at $300,000, currently located in Houston, TX, needs to be delivered to the San Clemente, CA, plant. The annual holding cost rate for this type of item has been estimated at 15%. There are five carriers available. Their delivery time and costs are listed in the table below. Which carrier is most economical?

Accepted Answer

Daily holding cost =

Question 5

Identify three techniques to control service inventories.

Accepted Answer

(1) good personnel selection,

Question 6

At the economic order quantity, holding costs are equal to product costs.

Accepted Answer

A) True 
 B)False

Question 7

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

Accepted Answer

A)  unchanged. 
B)  increased by less than 50%. 
C)  increased by 50%. 
D)  increased by more than 50%. 
E)  cannot be determined 
A)  unchanged. 
B)  increased by less than 50%. 
C)  increased by 50%. 
D)  increased by more than 50%. 
E)  cannot be determined

Question 8

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

Accepted Answer

The answer of In an economic order quantity problem, the...

Question 9

Consider the all-units quantity discount schedule below. The annual demand is 90,000 units, setup cost is $1000 per order, and annual holding cost is 30% of the unit cost. What is the optimal order quantity?

Accepted Answer

A)  1500 
B)  1690 
C)  1414 
D)  1000 
E)  1549 
A)  1500 
B)  1690 
C)  1414 
D)  1000 
E)  1549

Question 10

Which of the following statements regarding the reorder point is TRUE?

Accepted Answer

A)  The reorder point is that quantity that triggers an action to restock an item. 
B)  There is a reorder point even if lead time and demand during lead time are constant. 
C)  The reorder point is larger than d × L if safety stock is present. 
D)  A shorter lead time implies a smaller reorder point. 
E)  All of these are true. 
A)  The reorder point is that quantity that triggers an action to restock an item. 
B)  There is a reorder point even if lead time and demand during lead time are constant. 
C)  The reorder point is larger than d × L if safety stock is present. 
D)  A shorter lead time implies a smaller reorder point. 
E)  All of these are true.

Question 11

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

Accepted Answer

From formula (S11-1), we notice that whe

Question 12

Which of the following statements regarding Amazon.com is FALSE?

Accepted Answer

A)  The company was opened by Jeff Bezos in 1995. 
B)  The company was founded as a "virtual" retailer with no inventory. 
C)  The company is now a world-class leader in warehouse automation and management. 
D)  The company uses both United Parcel Service and the U.S. Postal Service as shippers. 
E)  Amazon obtains its competitive advantage mainly through effective worker scheduling. 
A)  The company was opened by Jeff Bezos in 1995. 
B)  The company was founded as a "virtual" retailer with no inventory. 
C)  The company is now a world-class leader in warehouse automation and management. 
D)  The company uses both United Parcel Service and the U.S. Postal Service as shippers. 
E)  Amazon obtains its competitive advantage mainly through effective worker scheduling.

Question 13

Q is to ________ systems as P is to ________ systems.

Accepted Answer

A)  fixed quantity, fixed period 
B)  variable demand, constant demand 
C)  variable lead time, variable demand 
D)  variable quantity, variable period 
E)  quality, price 
A)  fixed quantity, fixed period 
B)  variable demand, constant demand 
C)  variable lead time, variable demand 
D)  variable quantity, variable period 
E)  quality, price

Question 14

Explain how the solution procedure for the warehouse storage location problem uses a "bang-for-the-buck" approach.

Accepted Answer

The "bang" (value) here is the number of

Question 15

The purpose of safety stock is to:

Accepted Answer

A)  replace failed units with good ones. 
B)  eliminate the possibility of a stockout. 
C)  eliminate the likelihood of a stockout due to erroneous inventory tally. 
D)  control the likelihood of a stockout due to variable demand and/or lead time. 
E)  protect the firm from a sudden decrease in demand. 
A)  replace failed units with good ones. 
B)  eliminate the possibility of a stockout. 
C)  eliminate the likelihood of a stockout due to erroneous inventory tally. 
D)  control the likelihood of a stockout due to variable demand and/or lead time. 
E)  protect the firm from a sudden decrease in demand.

Question 16

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very front (closest to the dock)?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 17

What tracks both receipts and subtractions from inventory on a continuing basis?

Accepted Answer

A)  perpetual inventory 
B)  periodic system 
C)  cycle counting 
D)  ABC analysis 
E)  shrinkage 
A)  perpetual inventory 
B)  periodic system 
C)  cycle counting 
D)  ABC analysis 
E)  shrinkage

Question 18

A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $10, and trees sell for $40. What should the service level be?

Accepted Answer

A)  0.60 
B)  0.20 
C)  0.75 
D)  0.84 
E)  unable to determine given the above information 
A)  0.60 
B)  0.20 
C)  0.75 
D)  0.84 
E)  unable to determine given the above information

Question 19

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

Accepted Answer

A) True 
 B)False

Question 20

Define shrinkage. Identify three or more examples of shrinkage.

Accepted Answer

Shrinkage is retail inventory

Exam 11: Inventory Management

Choosing suppliers simply based on the lowest bid has become a popular approach.

Briefly describe how to conduct the factor weighting approach to supplier evaluation.

The reorder point is the inventory level at which action is taken to replenish the stocked item.

Identify three techniques to control service inventories.

At the economic order quantity, holding costs are equal to product costs.

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

Consider the all-units quantity discount schedule below. The annual demand is 90,000 units, setup cost is $1000 per order, and annual holding cost is 30% of the unit cost. What is the optimal order quantity?

Which of the following statements regarding the reorder point is TRUE?

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

Which of the following statements regarding Amazon.com is FALSE?

Q is to ________ systems as P is to ________ systems.

Explain how the solution procedure for the warehouse storage location problem uses a "bang-for-the-buck" approach.

The purpose of safety stock is to:

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very front (closest to the dock)?

What tracks both receipts and subtractions from inventory on a continuing basis?

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

Define shrinkage. Identify three or more examples of shrinkage.

Operations and Productivity

Operations Strategy in a Global Environment

Project Management

Forecasting

Design of Goods and Services

Managing Quality

Process Strategies

Location Strategies

Human Resources, Job Design, and Work Measurement

Supply Chain Management

Aggregate Planning and Sop

Material Requirements Planning Mrp and Erp

Short-Term Scheduling

Lean Operations

Maintenance and Reliability

Decision-Making Tools

Linear Programming

Transportation Models

Waiting-Line Models

Learning Curves

Simulation

Applying Analytics to Big Data in Operations Management

Filters

Q is to systems as P is to systems.