Question 1

Periodic review means:

Accepted Answer

A)  Ordering inventory to supplier call-offs on an as required basis 
B)  Ordering inventory at a fixed and regular time interval 
C)  Ordering inventory in consultation with suppliers relative to their available capacity 
D)  Ordering inventory when it falls below the designated safety stock level 
E)  Ordering inventory at a predetermined re-order level 
A)  Ordering inventory to supplier call-offs on an as required basis 
B)  Ordering inventory at a fixed and regular time interval 
C)  Ordering inventory in consultation with suppliers relative to their available capacity 
D)  Ordering inventory when it falls below the designated safety stock level 
E)  Ordering inventory at a predetermined re-order level B

Question 2

The economic order quantity (EOQ) formula requires the calculation of holding costs and ordering costs. Determine whether the following costs are items that should be included in holding costs,
Ordering costs or should not be included at all. The cost associated with a 'stock out' should be
Included in:

Accepted Answer

A)  Holding cost 
B)  Ordering cost 
C)  Should not be included 
A)  Holding cost 
B)  Ordering cost 
C)  Should not be included C

Question 3

In managing an inventory system, which of the following is NOT a major type of decision for the operation's manager to make?

Accepted Answer

A)  How to control the system 
B)  The relationship with the supplier 
C)  How much to order 
D)  When to order 
A)  How to control the system 
B)  The relationship with the supplier 
C)  How much to order 
D)  When to order B

Question 4

Which if the following is NOT seen as an advantage of the EOQ and EBQ models?

Accepted Answer

A)  The models give an indication of the batch size for each order. 
B)  The cost of stock is accurately incorporated in the models. 
C)  Small errors will not significantly affect the total cost of near optimum order quantity. 
D)  The models give a useful indication of how often to order. 
A)  The models give an indication of the batch size for each order. 
B)  The cost of stock is accurately incorporated in the models. 
C)  Small errors will not significantly affect the total cost of near optimum order quantity. 
D)  The models give a useful indication of how often to order.

Question 5

Cleaning materials would be a far more important item of inventory for an industrial cleaning
company compared with a television plant.

Accepted Answer

A) True 
 B)False

Question 6

Holding inventory is NOT risky because:

Accepted Answer

A)  It provides no security for uncertain demand 
B)  Inventory ties up considerable amounts of working capital 
C)  Items held in stock can deteriorate 
D)  Inventory can become obsolete 
A)  It provides no security for uncertain demand 
B)  Inventory ties up considerable amounts of working capital 
C)  Items held in stock can deteriorate 
D)  Inventory can become obsolete

Question 7

The costs of inventory outweigh the benefits of holding stock.

Accepted Answer

A) True 
 B)False

Question 8

The cost of being prevented from seeing the full extent of the problems within an operation is known as:

Accepted Answer

A)  Cost of placing an order 
B)  Stock out costs 
C)  Production inefficiency costs 
D)  Working capital costs 
E)  Price discount costs 
F) Storage costs
G) Obsolescence costs 
A)  Cost of placing an order 
B)  Stock out costs 
C)  Production inefficiency costs 
D)  Working capital costs 
E)  Price discount costs 
F) Storage costs
G) Obsolescence costs

Question 9

Cycle inventory can be used to compensate for the uncertainties in the process of the supply of
goods into the store, perhaps because of the unreliability of certain suppliers or transport firms.

Accepted Answer

A) True 
 B)False

Question 10

The economic order quantity (EOQ) formula requires the calculation of holding costs and ordering costs. Determine whether the following costs are items that should be included in holding costs,
Ordering costs or should not be included at all. The cost of warehousing the material should be
Included in:

Accepted Answer

A)  Holding cost 
B)  Ordering cost 
C)  Should not be included 
A)  Holding cost 
B)  Ordering cost 
C)  Should not be included

Question 11

Which of the following is NOT an example of inventory for a precious metals refiner?

Accepted Answer

A)  Material waiting to be processed 
B)  Partly-processed material 
C)  Lorries 
D)  Refined metal 
A)  Material waiting to be processed 
B)  Partly-processed material 
C)  Lorries 
D)  Refined metal

Question 12

Which of the following costs does NOT generally increase as order size is increased?

Accepted Answer

A)  Stock-out costs 
B)  Storage costs 
C)  Production inefficiency costs 
D)  Working capital costs 
A)  Stock-out costs 
B)  Storage costs 
C)  Production inefficiency costs 
D)  Working capital costs

Question 13

Which of the following inventories plays an important role in enhancing its quality?

Accepted Answer

A)  Timber 
B)  Concrete products 
C)  Scotch whisky 
D)  Blood in the health industry 
A)  Timber 
B)  Concrete products 
C)  Scotch whisky 
D)  Blood in the health industry

Question 14

Which of the following is NOT considered a disadvantage of holding inventory?

Accepted Answer

A)  They may be hazardous to store. 
B)  They can be duplicated at several different locations. 
C)  They make it hard to cope with unexpected demand. 
D)  They may become obsolete as alternatives become available. 
A)  They may be hazardous to store. 
B)  They can be duplicated at several different locations. 
C)  They make it hard to cope with unexpected demand. 
D)  They may become obsolete as alternatives become available.

Question 15

Cycle inventory is required as:

Accepted Answer

A)  One or more stages in the operation cannot supply all the items it produces simultaneously 
B)  Compensation for the uncertainties inherent in supply and demand 
C)  Compensation for differences in the timing of supply and demand 
D)  Material cannot be transported instantaneously between the point of supply and the point of demand 
A)  One or more stages in the operation cannot supply all the items it produces simultaneously 
B)  Compensation for the uncertainties inherent in supply and demand 
C)  Compensation for differences in the timing of supply and demand 
D)  Material cannot be transported instantaneously between the point of supply and the point of demand

Question 16

Which of the following is NOT an example of inventory held at Britvic's National Distribution Centre?

Accepted Answer

A)  Fork lift trucks 
B)  Pallets 
C)  Drinks 
D)  Packaging materials 
A)  Fork lift trucks 
B)  Pallets 
C)  Drinks 
D)  Packaging materials

Question 17

At a strategic level, the essential role of inventory is to support:

Accepted Answer

A)  Range, speed, flexibility and dependability 
B)  Quality, dependability, flexibility, cost and speed 
C)  Cost and speed 
D)  Flexibility, dependability and quality 
A)  Range, speed, flexibility and dependability 
B)  Quality, dependability, flexibility, cost and speed 
C)  Cost and speed 
D)  Flexibility, dependability and quality

Question 18

The cost associated with warehousing is known as:

Accepted Answer

A)  Production inefficiency costs 
B)  Price discount costs 
C)  Obsolescence costs 
D)  Cost of placing an order 
E)  Working capital costs
F) Storage costs
G) Stock out costs 
A)  Production inefficiency costs 
B)  Price discount costs 
C)  Obsolescence costs 
D)  Cost of placing an order 
E)  Working capital costs
F) Storage costs
G) Stock out costs

Question 19

In operations, inventory or stock is defined as the stored accumulation of material resources in a
transformation system.

Accepted Answer

A) True 
 B)False

Question 20

The purpose of buffer inventory is to compensate for unexpected fluctuations in supply and
demand.

Accepted Answer

A) True 
 B)False

Periodic review means:

In managing an inventory system, which of the following is NOT a major type of decision for the operation's manager to make?

Which if the following is NOT seen as an advantage of the EOQ and EBQ models?

Cleaning materials would be a far more important item of inventory for an industrial cleaning company compared with a television plant.

Holding inventory is NOT risky because:

The costs of inventory outweigh the benefits of holding stock.

The cost of being prevented from seeing the full extent of the problems within an operation is known as:

Cycle inventory can be used to compensate for the uncertainties in the process of the supply of goods into the store, perhaps because of the unreliability of certain suppliers or transport firms.

Which of the following is NOT an example of inventory for a precious metals refiner?

Which of the following costs does NOT generally increase as order size is increased?

Which of the following inventories plays an important role in enhancing its quality?

Which of the following is NOT considered a disadvantage of holding inventory?

Cycle inventory is required as:

Which of the following is NOT an example of inventory held at Britvic's National Distribution Centre?

At a strategic level, the essential role of inventory is to support:

The cost associated with warehousing is known as:

In operations, inventory or stock is defined as the stored accumulation of material resources in a transformation system.

The purpose of buffer inventory is to compensate for unexpected fluctuations in supply and demand.

Introduction to Operations Management

Competitiveness, Strategic Planning, and Productivity

Demand Forecasting

Product Design

Strategic Capacity Planning

Process Design and Facility Layout

Workjob Design

Location Planning and Analysis

Management of Quality

Statistical Quality Control

Supply Chain Management

Aggregate Operations Planning and Master Scheduling

Material Requirements Planning and Enterprise Resource Planning

Just-In-Time and Lean Production

Job and Staff Scheduling

Project Management

Waiting-Line Analysis

Answers to Selected Problems

Tables

Working With the Normal Distribution

Filters

Exam 12: Inventory Management

Periodic review means:

In managing an inventory system, which of the following is NOT a major type of decision for the operation's manager to make?

Which if the following is NOT seen as an advantage of the EOQ and EBQ models?

Cleaning materials would be a far more important item of inventory for an industrial cleaning company compared with a television plant.

Holding inventory is NOT risky because:

The costs of inventory outweigh the benefits of holding stock.

The cost of being prevented from seeing the full extent of the problems within an operation is known as:

Cycle inventory can be used to compensate for the uncertainties in the process of the supply of goods into the store, perhaps because of the unreliability of certain suppliers or transport firms.

Which of the following is NOT an example of inventory for a precious metals refiner?

Which of the following costs does NOT generally increase as order size is increased?

Which of the following inventories plays an important role in enhancing its quality?

Which of the following is NOT considered a disadvantage of holding inventory?

Cycle inventory is required as:

Which of the following is NOT an example of inventory held at Britvic's National Distribution Centre?

At a strategic level, the essential role of inventory is to support:

The cost associated with warehousing is known as:

In operations, inventory or stock is defined as the stored accumulation of material resources in a transformation system.

The purpose of buffer inventory is to compensate for unexpected fluctuations in supply and demand.

Introduction to Operations Management

Competitiveness, Strategic Planning, and Productivity

Demand Forecasting

Product Design

Strategic Capacity Planning

Process Design and Facility Layout

Workjob Design

Location Planning and Analysis

Management of Quality

Statistical Quality Control

Supply Chain Management

Aggregate Operations Planning and Master Scheduling

Material Requirements Planning and Enterprise Resource Planning

Just-In-Time and Lean Production

Job and Staff Scheduling

Project Management

Waiting-Line Analysis

Answers to Selected Problems

Tables

Working With the Normal Distribution

Filters