Question 1

List at least five of the six components of carrying costs.

Accepted Answer

Carrying costs, also known as holding costs, are the expenses associated with holding inventory in stock. These costs can be significant and can impact a company's profitability. Here are five of the six typical components of carrying costs:

1. **Storage Costs**: This includes the cost of the physical space where the inventory is stored, such as warehousing fees, rent, utilities, and maintenance of the storage facility.

2. **Capital Costs**: The cost of the capital tied up in inventory that could have been used elsewhere. This includes the opportunity cost of the investment and any interest expenses if the inventory was purchased with borrowed funds.

3. **Service Costs**: These are costs related to ensuring that the inventory is in usable condition when needed. It includes insurance on the inventory, as well as taxes and security systems to protect the goods.

4. **Risk Costs**: Inventory carries the risk of obsolescence, damage, theft, and deterioration. These risks can lead to a loss in value of the inventory over time, which is a cost to the business.

5. **Inventory Management Costs**: The operational costs associated with managing inventory, such as the labor for handling, tracking, and ordering inventory, as well as costs related to inventory management systems and technology.

The sixth component, which is not listed above, could be any of the following, depending on the context:

- **Shrinkage Costs**: Costs due to inventory loss from theft, errors, or waste.
- **Opportunity Costs**: While mentioned briefly under capital costs, opportunity costs can also be considered a separate category, representing the potential profit lost from not investing the capital elsewhere.
- **Obsolescence Costs**: Specific to products that may become outdated or unsellable due to changes in technology or consumer preferences.

Understanding and managing these carrying costs is crucial for businesses to maintain efficient inventory levels and to ensure profitability.

Question 2

Done properly, TQM involves taking away responsibility from workers for performing their job in the best way.

Accepted Answer

A) True 
 B)False  False

Question 3

The more units of inventory you procure, the cheaper the procurement costs per unit.

Accepted Answer

A) True 
 B)False  True

Question 4

The combination of usage during lead time and safety stock desired will determine the reorder point.

Accepted Answer

A) True 
 B)False

Question 5

The object of determining the EOQ is to _______.

Accepted Answer

A) minimize total 
B) variable costs 
C) maximize total product 
D) minimize total fixed costs 
E) equalize costs over a year's time
F) defray costs until the next accounting cycle 
A) minimize total 
B) variable costs 
C) maximize total product 
D) minimize total fixed costs 
E) equalize costs over a year's time
F) defray costs until the next accounting cycle

Question 6

Stopwatches are used to time a task for a direct time study.

Accepted Answer

A) True 
 B)False

Question 7

If the price of purchasing the goods is cheaper
 than manufacturing them, the firm will probably purchase the material in question.

Accepted Answer

A) True 
 B)False

Question 8

JIT techniques are the result of the supply-push efforts of a firm to schedule production.

Accepted Answer

A) True 
 B)False

Question 9

_______ specifies the time and sequence in which the work is to be done and develops a schedule for it.

Accepted Answer

A) Perpetuating 
B) Leading 
C) Reordering 
D) Scheduling 
E) Loading 
A) Perpetuating 
B) Leading 
C) Reordering 
D) Scheduling 
E) Loading

Question 10

Small lots minimize procurement costs while maximizing storage costs.

Accepted Answer

A) True 
 B)False

Question 11

A _______ shows work and how long it should take to be completed.

Accepted Answer

A) PERT Chart 
B) Excel Chart 
C) Gantt Chart 
D) Inventory Table 
E) Process Flow Chart 
A) PERT Chart 
B) Excel Chart 
C) Gantt Chart 
D) Inventory Table 
E) Process Flow Chart

Question 12

The transformational process consists of which of the following elements?

Accepted Answer

A) Input 
B) Design 
C) Realignment 
D) Process 
E) Output 
A) Input 
B) Design 
C) Realignment 
D) Process 
E) Output

Question 13

Describe the mission of logistics and how it can work for a company.

Accepted Answer

The mission of logistics is to efficient

Question 14

Which of the following is true of supply chain management?

Accepted Answer

A) Having a good relationship with suppliers throughout the supply chain is essential to the success of a small business. 
B) It is the network of businesses that participate in the process of producing and delivering a product to the customer. 
C) It is also called the value chain. 
D) It coordinates the flow of information and materials through the supply chain. 
E) It coordinates the flow of money through the supply chain. 
A) Having a good relationship with suppliers throughout the supply chain is essential to the success of a small business. 
B) It is the network of businesses that participate in the process of producing and delivering a product to the customer. 
C) It is also called the value chain. 
D) It coordinates the flow of information and materials through the supply chain. 
E) It coordinates the flow of money through the supply chain.

Question 15

_______ refers to the component material or physical goods that any operation must consume.

Accepted Answer

A) Inventory 
B) Materials 
C) Warehousing 
D) Capital outlay 
E) Time and motion study 
A) Inventory 
B) Materials 
C) Warehousing 
D) Capital outlay 
E) Time and motion study

Question 16

Contrast motion study, direct time study, and predetermined time standards.

Accepted Answer

Motion study, direct time study, and pre

Question 17

Which of the following is true of material requirement planning?

Accepted Answer

A) It costs a firm more money by increasing inventory levels. 
B) It saves the firm money by 
C) reducing inventory levels. 
D) It controls the material needed in production. 
E) It yields slower delivery times.
F) Just-in-Time inventory can slow a production process down. 
A) It costs a firm more money by increasing inventory levels. 
B) It saves the firm money by 
C) reducing inventory levels. 
D) It controls the material needed in production. 
E) It yields slower delivery times.
F) Just-in-Time inventory can slow a production process down.

Question 18

_______ are those costs associated with ordering materials from the ordering cost through receiving, inspection, and storage.

Accepted Answer

A) Cover costs 
B) Lost cost 
C) Inventory costs 
D) Carrying costs 
E) Rolling costs 
A) Cover costs 
B) Lost cost 
C) Inventory costs 
D) Carrying costs 
E) Rolling costs

Question 19

The mission of _______ is to produce the appropriate goods or services in the right quality and quantity, and to distribute them to the right place at the right time.

Accepted Answer

A) inventory 
B) outsourcing 
C) logistics 
D) warranties 
E) time studies 
A) inventory 
B) outsourcing 
C) logistics 
D) warranties 
E) time studies

Question 20

Define ISO 9000 and describe how it is used today.

Accepted Answer

ISO 9000 is a set of international stand

List at least five of the six components of carrying costs.

Done properly, TQM involves taking away responsibility from workers for performing their job in the best way.

The more units of inventory you procure, the cheaper the procurement costs per unit.

The combination of usage during lead time and safety stock desired will determine the reorder point.

The object of determining the EOQ is to _______.

Stopwatches are used to time a task for a direct time study.

If the price of purchasing the goods is cheaper than manufacturing them, the firm will probably purchase the material in question.

JIT techniques are the result of the supply-push efforts of a firm to schedule production.

_______ specifies the time and sequence in which the work is to be done and develops a schedule for it.

Small lots minimize procurement costs while maximizing storage costs.

A _______ shows work and how long it should take to be completed.

The transformational process consists of which of the following elements?

Describe the mission of logistics and how it can work for a company.

Which of the following is true of supply chain management?

_______ refers to the component material or physical goods that any operation must consume.

Contrast motion study, direct time study, and predetermined time standards.

Which of the following is true of material requirement planning?

_______ are those costs associated with ordering materials from the ordering cost through receiving, inspection, and storage.

The mission of _______ is to produce the appropriate goods or services in the right quality and quantity, and to distribute them to the right place at the right time.

Define ISO 9000 and describe how it is used today.

Whats Entrepreneurship About Do You Want to Start Your Own Business

New Venture Options: Do You Want to Start a New Business, Buy One, Be a Franchisee, or a Corporate or Nonprofit Entrepreneur

What Business How Do You Find Opportunities and Develop a Business Model

How Do You Assess the Chances of Venture Success Feasibility Analysis and Protecting the Business Model Legally

Business Planning: Whats Your Legal Form and Strategy

The Marketing Plan: Who Are Your Customers

The Location and Layout Plan: What Facilities Do You Need

The Human Resource Plan: How Do You Develop the New Venture Team and Employees

The Finance Plan: How Much Money Do You Need

Sources of Funds: Where Do You Get the Money

Controls: How Do You Keep the New Venture on Track

Filters

Exam 8: The Operations Plan: How Will You Make the Product

List at least five of the six components of carrying costs.

Done properly, TQM involves taking away responsibility from workers for performing their job in the best way.

The more units of inventory you procure, the cheaper the procurement costs per unit.

The combination of usage during lead time and safety stock desired will determine the reorder point.

The object of determining the EOQ is to _______.

Stopwatches are used to time a task for a direct time study.

If the price of purchasing the goods is cheaper than manufacturing them, the firm will probably purchase the material in question.

JIT techniques are the result of the supply-push efforts of a firm to schedule production.

_______ specifies the time and sequence in which the work is to be done and develops a schedule for it.

Small lots minimize procurement costs while maximizing storage costs.

A _______ shows work and how long it should take to be completed.

The transformational process consists of which of the following elements?

Describe the mission of logistics and how it can work for a company.

Which of the following is true of supply chain management?

_______ refers to the component material or physical goods that any operation must consume.

Contrast motion study, direct time study, and predetermined time standards.

Which of the following is true of material requirement planning?

_______ are those costs associated with ordering materials from the ordering cost through receiving, inspection, and storage.

The mission of _______ is to produce the appropriate goods or services in the right quality and quantity, and to distribute them to the right place at the right time.

Define ISO 9000 and describe how it is used today.

Whats Entrepreneurship About Do You Want to Start Your Own Business

New Venture Options: Do You Want to Start a New Business, Buy One, Be a Franchisee, or a Corporate or Nonprofit Entrepreneur

What Business How Do You Find Opportunities and Develop a Business Model

How Do You Assess the Chances of Venture Success Feasibility Analysis and Protecting the Business Model Legally

Business Planning: Whats Your Legal Form and Strategy

The Marketing Plan: Who Are Your Customers

The Location and Layout Plan: What Facilities Do You Need

The Human Resource Plan: How Do You Develop the New Venture Team and Employees

The Finance Plan: How Much Money Do You Need

Sources of Funds: Where Do You Get the Money

Controls: How Do You Keep the New Venture on Track

Filters