Exam 7: Inventory Management

The ABC inventory matrix shows an ABC inventory classification based on annual usage on the vertical axis and an ABC inventory classification based on physical inventory on the horizontal axis.

The four broad categories of inventory are raw materials, work-in-process, subassemblies, and finished goods.

Which of the following is a disadvantage of excessive inventory?

The ABC inventory control system categorizes inventory items into three groups, A, B, and C.A items are given highest priority, while C items have the lowest priority.Prioritization may be based on annual dollar usage, shelf life, or sales volume.

If an item is ordered at its economic order quantity, the annual carrying cost should be:

Which of the following is not an example of an ordering cost for products purchased from a supplier?

Service parts sold to the repair shops are examples of dependent demand.

Which of the following cannot be considered as independent demand items?

Companies hold a supply of inventory for all of the following reasons EXCEPT:

The periodic inventory review system reviews physical inventory at specific points in time.

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model, the average amount of inventory on hand

Name the two major RFID standards.

The total annual inventory cost is the sum of the annual purchase cost, the annual holding cost, the annual capacity cost, and the annual ordering cost.

Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period.Faster turnovers are generally viewed as negative because it indicates instability in the firm's inventory level.

If your company had an annual purchase cost of items equal to $2,000,000, an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

Electronic Product Code (EPC) is the only RFID standard adopted by the commercial sector and the U.S.Department of Defense.

In the absence of demand and delivery lead time uncertainty, reorder point is the ____.

The (s, S) continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.

Name and briefly describe the four basic types of inventory.

The cost of a widget is $5, and the carrying rate is 40%; cost of processing an order is $25, annual demand is for 400 widgets, and supply and usage patterns are stable.What is the economic order quantity (EOQ)?