Question 1

How is inventory turnover ratio calculated?

Accepted Answer

A) By dividing the cost of goods sold by the average inventory. 
B) By multiplying the beginning and ending inventory, then dividing by 4. 
C) Both by A and B. 
D) It cannot be calculated 
A) By dividing the cost of goods sold by the average inventory. 
B) By multiplying the beginning and ending inventory, then dividing by 4. 
C) Both by A and B. 
D) It cannot be calculated A

Question 2

_______ makes the best use of material, labor, and equipment and maintains inventory investment at the required levels.

Accepted Answer

A) MRP 
B) MPR II 
C) MPS 
D) A production plan 
A) MRP 
B) MPR II 
C) MPS 
D) A production plan C

Question 3

Both inventory turnover and GMROI are stated as an annual turnover, but due to ________ items they may be measured for a period of few months.

Accepted Answer

A) Defense 
B) Electronic 
C) Seasonal 
D) Fragile 
A) Defense 
B) Electronic 
C) Seasonal 
D) Fragile C

Question 4

An inventory turnover ratio:

Accepted Answer

A) Measures how often a company moves its inventory out to its supplies within a systematic period of time. 
B) Measures the predictability of inbound inventories. 
C) Measures the profitability of trading inventories. 
D) None of the above. 
A) Measures how often a company moves its inventory out to its supplies within a systematic period of time. 
B) Measures the predictability of inbound inventories. 
C) Measures the profitability of trading inventories. 
D) None of the above.

Question 5

Replenish policies determine the cycle and safety inventories along the ____________and the ___________.

Accepted Answer

A) Demand,; supply. 
B) Fr; CSL. 
C) Network; framework. 
D) None of the above. 
A) Demand,; supply. 
B) Fr; CSL. 
C) Network; framework. 
D) None of the above.

Question 6

Why must firms decide which inventory to build and which to not?

Accepted Answer

A) Due to limited demand. 
B) Due to limited production. 
C) Due to access demand season. 
D) Due to limited labor. 
A) Due to limited demand. 
B) Due to limited production. 
C) Due to access demand season. 
D) Due to limited labor.

Question 7

What is the formula of a Gross Margin Return on Investment (GMROI)?

Accepted Answer

A) Gross margin/total inventory cost. 
B) Gross margin/average inventory cost. 
C) Total Inventory + average inventory/gross margin. 
D) All of the above formulas. 
A) Gross margin/total inventory cost. 
B) Gross margin/average inventory cost. 
C) Total Inventory + average inventory/gross margin. 
D) All of the above formulas.

Question 8

Substitution in inventories only occurs when __________.

Accepted Answer

A) Suppliers make the decision to substitute 
B) Customers make the decision to substitute 
C) Manufacturers make the decisions to substitute 
D) All of the above. 
A) Suppliers make the decision to substitute 
B) Customers make the decision to substitute 
C) Manufacturers make the decisions to substitute 
D) All of the above.

Question 9

In a time flexibility strategy, the results are in ______levels on inventory.

Accepted Answer

A) Low. 
B) High. 
C) Both. 
D) No change in levels. 
A) Low. 
B) High. 
C) Both. 
D) No change in levels.

Question 10

Safety inventory is an inventory carried for the purpose of satisfying demand that ________________ for a given period.

Accepted Answer

A) Exceeds the amount forecasted. 
B) Exceeds the supply forecasted. 
C) Diminishes the demand forecasted. 
D) Diminishes the supply forecasted. 
A) Exceeds the amount forecasted. 
B) Exceeds the supply forecasted. 
C) Diminishes the demand forecasted. 
D) Diminishes the supply forecasted.

Question 11

What is an average inventory?

Accepted Answer

A) The sum of the current inventory and the beginning inventory divided by 2. 
B) The sum of the current inventory and the ending inventory divided by 4. 
C) The sum of the beginning inventory and the current inventory divided by 10. 
D) Both A and C. 
A) The sum of the current inventory and the beginning inventory divided by 2. 
B) The sum of the current inventory and the ending inventory divided by 4. 
C) The sum of the beginning inventory and the current inventory divided by 10. 
D) Both A and C.

Question 12

How do you determine a cost of goods sold?

Accepted Answer

A) Calculate the average inventory 
B) Calculate the inventory turnover ratio. 
C) Calculate the gross profit in a quarter. 
D) Both A and B. 
A) Calculate the average inventory 
B) Calculate the inventory turnover ratio. 
C) Calculate the gross profit in a quarter. 
D) Both A and B.

Question 13

A store manager at D&N clothing line continuously tracks the inventory of Jeans. They order 700 Jeans when the inventory drops below 300. In this case, the size of the order does not change from one order to the next. The tine between orders may fluctuate given variable demand. This example is of a replenishment policy known as ____________.

Accepted Answer

A) Continuous Review 
B) Non-continuous Review 
C) Subjective Review 
D) Imperative Review 
A) Continuous Review 
B) Non-continuous Review 
C) Subjective Review 
D) Imperative Review

Question 14

In a ___________ supply chains, there are many stages with many players at each stage and one stage supplying another.

Accepted Answer

A) Multi-directive cycle inventory. 
B) Multi-echelon cycle inventory. 
C) Both of these. 
D) None of these. 
A) Multi-directive cycle inventory. 
B) Multi-echelon cycle inventory. 
C) Both of these. 
D) None of these.

Question 15

What is a cycle inventory in a supply chain?

Accepted Answer

A) Average inventory. 
B) Scarped inventory. 
C) Fragile inventory. 
D) None of these. 
A) Average inventory. 
B) Scarped inventory. 
C) Fragile inventory. 
D) None of these.

Question 16

There are several ways to measure product availability. Which of the following is not considered a measure?

Accepted Answer

A) Product fill rate. 
B) Cycle service level. 
C) VAT rate. 
D) Order fill rate. 
A) Product fill rate. 
B) Cycle service level. 
C) VAT rate. 
D) Order fill rate.

Question 17

When managing inventory to meet predictable variability, firms use which of the following approaches?

Accepted Answer

A) Using common components across multiple products. 
B) Using specific components across multiple products. 
C) Using multiple components across specific products. 
D) None of the above. 
A) Using common components across multiple products. 
B) Using specific components across multiple products. 
C) Using multiple components across specific products. 
D) None of the above.

Question 18

Which of the following is the best reason to justify the fact that Inventory turn and GMROI should be calculated quarterly rather than annually?

Accepted Answer

A) Due to frequent fluctuation in sales and inventory. 
B) Due to frequent fluctuation in average and total Inventory. 
C) Due to frequent depreciation. 
D) All of the above. 
A) Due to frequent fluctuation in sales and inventory. 
B) Due to frequent fluctuation in average and total Inventory. 
C) Due to frequent depreciation. 
D) All of the above.

Question 19

Which of the following statements is correct about obtaining a high level of accuracy for inventory records?

Accepted Answer

A) It will usually lead to a reduction of inventory levels. 
B) It is not necessary to achieve because of safety stocks and safety lead-time. 
C) It will result in savings that are likely to be small and difficult to determine. 
D) It is probably impossible to achieve and will be costly to obtain. 
A) It will usually lead to a reduction of inventory levels. 
B) It is not necessary to achieve because of safety stocks and safety lead-time. 
C) It will result in savings that are likely to be small and difficult to determine. 
D) It is probably impossible to achieve and will be costly to obtain.

Question 20

Which of the following results in inventory build-ups in low-demand periods?

Accepted Answer

A) Level strategy. 
B) Chase strategy. 
C) Hybrid strategy. 
D) None of these. 
A) Level strategy. 
B) Chase strategy. 
C) Hybrid strategy. 
D) None of these.

How is inventory turnover ratio calculated?

_______ makes the best use of material, labor, and equipment and maintains inventory investment at the required levels.

Both inventory turnover and GMROI are stated as an annual turnover, but due to ________ items they may be measured for a period of few months.

An inventory turnover ratio:

Replenish policies determine the cycle and safety inventories along the __and the _.

Why must firms decide which inventory to build and which to not?

What is the formula of a Gross Margin Return on Investment (GMROI)?

Substitution in inventories only occurs when __________.

In a time flexibility strategy, the results are in ______levels on inventory.

Safety inventory is an inventory carried for the purpose of satisfying demand that ________________ for a given period.

What is an average inventory?

How do you determine a cost of goods sold?

In a ___________ supply chains, there are many stages with many players at each stage and one stage supplying another.

What is a cycle inventory in a supply chain?

There are several ways to measure product availability. Which of the following is not considered a measure?

When managing inventory to meet predictable variability, firms use which of the following approaches?

Which of the following is the best reason to justify the fact that Inventory turn and GMROI should be calculated quarterly rather than annually?

Which of the following statements is correct about obtaining a high level of accuracy for inventory records?

Which of the following results in inventory build-ups in low-demand periods?

Core Concepts

Customer Relationship Management

Demand

Design and Improvement

Dynamics

Efficiency

Global Management

Logistics

Managing Supply

Market Segments

Risk

Supplier Relationship Management

Strategy Alignment

Sustainability

Filters

Exam 8: Inventory

How is inventory turnover ratio calculated?

_______ makes the best use of material, labor, and equipment and maintains inventory investment at the required levels.

Both inventory turnover and GMROI are stated as an annual turnover, but due to ________ items they may be measured for a period of few months.

An inventory turnover ratio:

Replenish policies determine the cycle and safety inventories along the ____________and the ___________.

Why must firms decide which inventory to build and which to not?

What is the formula of a Gross Margin Return on Investment (GMROI)?

Substitution in inventories only occurs when __________.

In a time flexibility strategy, the results are in ______levels on inventory.

Safety inventory is an inventory carried for the purpose of satisfying demand that ________________ for a given period.

What is an average inventory?

How do you determine a cost of goods sold?

In a ___________ supply chains, there are many stages with many players at each stage and one stage supplying another.

What is a cycle inventory in a supply chain?

There are several ways to measure product availability. Which of the following is not considered a measure?

When managing inventory to meet predictable variability, firms use which of the following approaches?

Which of the following is the best reason to justify the fact that Inventory turn and GMROI should be calculated quarterly rather than annually?

Which of the following statements is correct about obtaining a high level of accuracy for inventory records?

Which of the following results in inventory build-ups in low-demand periods?

Core Concepts

Customer Relationship Management

Demand

Design and Improvement

Dynamics

Efficiency

Global Management

Logistics

Managing Supply

Market Segments

Risk

Supplier Relationship Management

Strategy Alignment

Sustainability

Filters

Replenish policies determine the cycle and safety inventories along the __and the _.