Question 1

Which of the following is not a direct financial cost of inventory?

Accepted Answer

A)  cost of utilities 
B)  opportunity cost of capital locked up in inventory 
C)  interest paid on capital 
D)  All of the above are direct financial costs of inventory. 
A)  cost of utilities 
B)  opportunity cost of capital locked up in inventory 
C)  interest paid on capital 
D)  All of the above are direct financial costs of inventory. A

Question 2

Managers can reduce inventory through all of the following demand management levers except

Accepted Answer

A)  forecasting 
B)  component sharing across products 
C)  unplanned shortages 
D)  product/component substitution 
A)  forecasting 
B)  component sharing across products 
C)  unplanned shortages 
D)  product/component substitution C

Question 3

Technologies such as _________ are being employed to track and trace inventory and allow for more accurate processing.

Accepted Answer

RFID

Question 4

All of the following are inventory classification systems except

Accepted Answer

A)  FSN 
B)  VED 
C)  SKU 
D)  ABC 
A)  FSN 
B)  VED 
C)  SKU 
D)  ABC

Question 5

Fixed costs and variable costs are direct costs of holding inventory.

Accepted Answer

A) True 
 B)False

Question 6

The average fill rate is a measure of how much we carry on average, for any given day, over a specific time period.

Accepted Answer

A) True 
 B)False

Question 7

Kitchens Unlimited has an inventory decision rule which states that "when the inventory level goes down to 20 cabinets, an order for 50 cabinets will be placed." Which of the following statements best describes their inventory management policy?

Accepted Answer

A)  They are pursuing a reorder point policy. 
B)  They monitor their inventory continuously. 
C)  Twenty is the amount of the safety stock, and 50 is the order quantity. 
D)  All of these statements are true. 
A)  They are pursuing a reorder point policy. 
B)  They monitor their inventory continuously. 
C)  Twenty is the amount of the safety stock, and 50 is the order quantity. 
D)  All of these statements are true.

Question 8

Describe the ABC classification system. What are some inventory policies that can be based on the results of an ABC analysis?

Accepted Answer

The ABC classification system is a metho

Question 9

In ABC analysis, C category items are most closely monitored and have the most accurate record keeping and easy-to-access locations.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a function of inventory?

Accepted Answer

A)  to provide a stock of goods that will provide a selection for customers 
B)  to hedge against inflation 
C)  uncertainty about future demand 
D)  all of the above 
A)  to provide a stock of goods that will provide a selection for customers 
B)  to hedge against inflation 
C)  uncertainty about future demand 
D)  all of the above

Question 11

UPS codes are standard codes that are provided by the manufacturer of the product.

Accepted Answer

A) True 
 B)False

Question 12

Describe the three most commonly used inventory performance measures.

Accepted Answer

The three most commonly used inventory p

Question 13

Which of the following is not a recent trend in managing inventory?

Accepted Answer

A)  the use of truly intelligent integrated supply chain management systems 
B)  the use of statistical quality control for accurate shipments 
C)  the use of RFID (radio frequency identification devices) technologies permeating down to the SKU level 
D)  the use of distributed order management (DOM) to capture orders from multiple channels 
A)  the use of truly intelligent integrated supply chain management systems 
B)  the use of statistical quality control for accurate shipments 
C)  the use of RFID (radio frequency identification devices) technologies permeating down to the SKU level 
D)  the use of distributed order management (DOM) to capture orders from multiple channels

Question 14

As inventory turnover increases, the costs of placing repeated orders to replenish inventory increase.

Accepted Answer

A) True 
 B)False

Question 15

_________ inventory turnover will lead to _________ inventory levels and cash savings.

Accepted Answer

The answer of _________ inventory turnover will lead to _________...

Question 16

Which of the following statements about ABC analysis is false?

Accepted Answer

A)  ABC analysis is based on the presumption that all inventory items must be tightly controlled. 
B)  ABC analysis is based on the well-known Pareto principle. 
C)  In ABC analysis, C category items have minimal monitoring and wider latitude in record keeping accuracy. 
D)  All of the above statements are true. 
A)  ABC analysis is based on the presumption that all inventory items must be tightly controlled. 
B)  ABC analysis is based on the well-known Pareto principle. 
C)  In ABC analysis, C category items have minimal monitoring and wider latitude in record keeping accuracy. 
D)  All of the above statements are true.

Question 17

The hospital now changes suppliers and the lead time is known to be four days. If the standard deviation of the demand for surgical stents is 6 per week, demand averages 50 per week, and the desired service level is still 95 percent, what is the approximate reorder point?

Accepted Answer

A)  200 stents 
B)  220 stents 
C)  90 stents 
D)  240 stents 
A)  200 stents 
B)  220 stents 
C)  90 stents 
D)  240 stents

Question 18

Cycle counting of inventory calls for counting the number of inventory cycles in a year.

Accepted Answer

A) True 
 B)False

Question 19

Higher inventory turnover will lead to lower inventory levels and cash savings.

Accepted Answer

A) True 
 B)False

Question 20

FSN and VED are two alternate methods of analyzing the importance of various inventory items.

Accepted Answer

A) True 
 B)False

Which of the following is not a direct financial cost of inventory?

Managers can reduce inventory through all of the following demand management levers except

Technologies such as _________ are being employed to track and trace inventory and allow for more accurate processing.

All of the following are inventory classification systems except

Fixed costs and variable costs are direct costs of holding inventory.

The average fill rate is a measure of how much we carry on average, for any given day, over a specific time period.

Kitchens Unlimited has an inventory decision rule which states that "when the inventory level goes down to 20 cabinets, an order for 50 cabinets will be placed." Which of the following statements best describes their inventory management policy?

Describe the ABC classification system. What are some inventory policies that can be based on the results of an ABC analysis?

In ABC analysis, C category items are most closely monitored and have the most accurate record keeping and easy-to-access locations.

Which of the following is a function of inventory?

UPS codes are standard codes that are provided by the manufacturer of the product.

Describe the three most commonly used inventory performance measures.

Which of the following is not a recent trend in managing inventory?

As inventory turnover increases, the costs of placing repeated orders to replenish inventory increase.

_ inventory turnover will lead to _ inventory levels and cash savings.

Which of the following statements about ABC analysis is false?

The hospital now changes suppliers and the lead time is known to be four days. If the standard deviation of the demand for surgical stents is 6 per week, demand averages 50 per week, and the desired service level is still 95 percent, what is the approximate reorder point?

Cycle counting of inventory calls for counting the number of inventory cycles in a year.

Higher inventory turnover will lead to lower inventory levels and cash savings.

FSN and VED are two alternate methods of analyzing the importance of various inventory items.

Operations Management and You

Designing Products and Processes

Process and Service Design

Managing Processes

Forecasting

Capacity Planning

Managing Capacity

Managing Quality

Supply Chain Design

Managing Supply Chains

Finding the Right Location

Working With Projects

Filters

Exam 8: Managing Inventory

Which of the following is not a direct financial cost of inventory?

Managers can reduce inventory through all of the following demand management levers except

Technologies such as _________ are being employed to track and trace inventory and allow for more accurate processing.

All of the following are inventory classification systems except

Fixed costs and variable costs are direct costs of holding inventory.

The average fill rate is a measure of how much we carry on average, for any given day, over a specific time period.

Kitchens Unlimited has an inventory decision rule which states that "when the inventory level goes down to 20 cabinets, an order for 50 cabinets will be placed." Which of the following statements best describes their inventory management policy?

Describe the ABC classification system. What are some inventory policies that can be based on the results of an ABC analysis?

In ABC analysis, C category items are most closely monitored and have the most accurate record keeping and easy-to-access locations.

Which of the following is a function of inventory?

UPS codes are standard codes that are provided by the manufacturer of the product.

Describe the three most commonly used inventory performance measures.

Which of the following is not a recent trend in managing inventory?

As inventory turnover increases, the costs of placing repeated orders to replenish inventory increase.

_________ inventory turnover will lead to _________ inventory levels and cash savings.

Which of the following statements about ABC analysis is false?

The hospital now changes suppliers and the lead time is known to be four days. If the standard deviation of the demand for surgical stents is 6 per week, demand averages 50 per week, and the desired service level is still 95 percent, what is the approximate reorder point?

Cycle counting of inventory calls for counting the number of inventory cycles in a year.

Higher inventory turnover will lead to lower inventory levels and cash savings.

FSN and VED are two alternate methods of analyzing the importance of various inventory items.

Operations Management and You

Designing Products and Processes

Process and Service Design

Managing Processes

Forecasting

Capacity Planning

Managing Capacity

Managing Quality

Supply Chain Design

Managing Supply Chains

Finding the Right Location

Working With Projects

Filters

_ inventory turnover will lead to _ inventory levels and cash savings.