Exam 9: Inventory Management Fundamentals and Independent Demand

Compute the required safety stock when weekly demand is 100 units,lead time is 2 weeks,the desired service level is 98% (which corresponds to 2.06 standard deviations from the mean)and the standard deviation of demand during lead time is 30 units.

Service level is the probability that an item will be available in stock for order fulfillment.

In ABC inventory analysis,the typical percentage for the total dollar volume of C items is

Inventory systems in which inventory levels are continuously monitored to determine placement of an order are known as ________ systems.

The rate at which firms use up their inventory is known as ________.

Producing extra inventory during periods of low demand,which is then consumed during periods of high demand,is known as ________.

If a firm has annual cost of goods sold of $100 million and turn over inventory twice a month,the average inventory they carry would be

Walmart Stores sell the popular Tide detergent brand supplied by Procter and Gamble (P&G).In this case P&G owns and also manages the inventory; however,the inventory is housed in Walmart Stores.Such an arrangement is called

In ABC analysis,inventory items are classified by unit cost,with expensive items being classified as A items,and inexpensive items being classified as C items.

Inventory turnover is the average inventory divided by total sales.

Products that are waiting to be sold to customers are known as

Compute the reorder point when daily demand is 25 units,orders are placed every 15 days,the lead time is 10 days,the desired service level is 98% (which corresponds to 2.06 standard deviations from the mean),50 units are on hand and the standard deviation of daily demand during the uncertainty period is 10 units.

In the EOQ inventory model,ordering cost is always equal to carrying cost at the EOQ.

Best Tools turns over inventory once every month and its annual cost of goods sold is $180 million.The amount of average inventory they carry is ________.

The two important inventory decisions in managing inventory for independent demand items are how much to order and which vendor to use.

Inventory that is completed and placed into inventory for sale at a later date is known as ________ inventory.

Use the information below to answer the following questions: The materials manager for a billiard ball maker must periodically place orders for resin,one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day,and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order,and that the lead time for delivery is four (4)days. Assume 365 days in a year. -What is the Total Cost (TC)at the EOQ?

Inventory that is kept at the intersection of differing stages of production to maintain continuity of processing is called hedge inventory.

Inventory that has been received and is in the production phase is known as ________ inventory.

Hallmark manufactures greeting cards throughout the year,building up inventory during lean periods to be utilized during the holiday period.They are using a technique known as ________.