Question 1

Major categories of inventory-related costs include ______.

Accepted Answer

A) cost of defective raw materials 
B) holding or carrying costs 
C) cost of government audits 
D) cost of holding the wrong products 
A) cost of defective raw materials 
B) holding or carrying costs 
C) cost of government audits 
D) cost of holding the wrong products B

Question 2

In a single-period system,______.

Accepted Answer

A) the entire inventory of a product is ordered at one time 
B) as inventory is consumed it is continuously replenished 
C) inventory is replenished halfway during a consumption cycle 
D) the entire inventory of a product is ordered by a single customer 
A) the entire inventory of a product is ordered at one time 
B) as inventory is consumed it is continuously replenished 
C) inventory is replenished halfway during a consumption cycle 
D) the entire inventory of a product is ordered by a single customer A

Question 3

VMI is ______.

Accepted Answer

A) a channel alignment method that mitigates the bullwhip effect caused by forecast updates 
B) vertically merged integration 
C) when the vendor merges his inventory with the inventory of the company 
D) a way to reduce cost of inventory transportation 
A) a channel alignment method that mitigates the bullwhip effect caused by forecast updates 
B) vertically merged integration 
C) when the vendor merges his inventory with the inventory of the company 
D) a way to reduce cost of inventory transportation A

Question 4

Which of the following is NOT associated with cycle counting?

Accepted Answer

A) counting a random sample or subset of inventory in stock 
B) counting inventory in a particular location 
C) counting inventory on a particular day 
D) counting units left in inventory after the sale of each unit 
A) counting a random sample or subset of inventory in stock 
B) counting inventory in a particular location 
C) counting inventory on a particular day 
D) counting units left in inventory after the sale of each unit

Question 5

To achieve the goals of inventory management,operations managers should ask this: ______.

Accepted Answer

A) How much inventory should we order or produce? 
B) What products should we offer? 
C) At what price should we offer a product? 
D) What level of quality should we offer? 
A) How much inventory should we order or produce? 
B) What products should we offer? 
C) At what price should we offer a product? 
D) What level of quality should we offer?

Question 6

Which of the following is usually NOT a reason to hold inventory?

Accepted Answer

A) to drive up price 
B) to smooth out fluctuations in production 
C) to hedge against variations in demand and supply 
D) to decouple one step in the production process from another 
A) to drive up price 
B) to smooth out fluctuations in production 
C) to hedge against variations in demand and supply 
D) to decouple one step in the production process from another

Question 7

Holding costs can be expressed as ______.

Accepted Answer

A) the total carrying cost per unit per time period 
B) the sum of setup costs and ordering costs 
C) a hidden cost 
D) proportional to manufacturing costs 
A) the total carrying cost per unit per time period 
B) the sum of setup costs and ordering costs 
C) a hidden cost 
D) proportional to manufacturing costs

Question 8

Which of the following is NOT a benefit of cycle counting?

Accepted Answer

A) fewer disruptions to daily operations than a complete physical count 
B) providing an ongoing measure of inventory accuracy 
C) focusing on items critical to business processes 
D) less time consuming than using RFID 
A) fewer disruptions to daily operations than a complete physical count 
B) providing an ongoing measure of inventory accuracy 
C) focusing on items critical to business processes 
D) less time consuming than using RFID

Question 9

When we apply the ABC classification to cycle counting,we would ______.

Accepted Answer

A) cycle count A items more frequently than B items 
B) cycle count C items more frequently than A items 
C) cycle count C items more frequently than B items 
D) cycle count C items as frequently as A items 
A) cycle count A items more frequently than B items 
B) cycle count C items more frequently than A items 
C) cycle count C items more frequently than B items 
D) cycle count C items as frequently as A items

Question 10

Which of the following is least consistent with sustainability practices in inventory management?

Accepted Answer

A) minimizing wasted movement 
B) less excess inventory 
C) reduced waiting time 
D) push system 
A) minimizing wasted movement 
B) less excess inventory 
C) reduced waiting time 
D) push system

Question 11

Which of the following is true with regard to fill rates and inventory?

Accepted Answer

A) There is a strong relationship between fill rates and the amount of inventory in stock. 
B) As inventory is added in steady increments,a firm's fill rate decreases. 
C) The higher the fill rate,the easier it is to improve the fill rate. 
D) Fill rates are inversely related to inventory levels. 
A) There is a strong relationship between fill rates and the amount of inventory in stock. 
B) As inventory is added in steady increments,a firm's fill rate decreases. 
C) The higher the fill rate,the easier it is to improve the fill rate. 
D) Fill rates are inversely related to inventory levels.

Question 12

Anticipation inventory is ______.

Accepted Answer

A) inventory held in excess of a firm's cycle stock 
B) to avoid expected fall in demand 
C) also called seasonal inventory 
D) stock-out avoidance inventory 
A) inventory held in excess of a firm's cycle stock 
B) to avoid expected fall in demand 
C) also called seasonal inventory 
D) stock-out avoidance inventory

Question 13

Which of the following is NOT a type of inventory-related costs?

Accepted Answer

A) purchasing costs 
B) ordering costs 
C) setup costs 
D) cost of holding the wrong products 
A) purchasing costs 
B) ordering costs 
C) setup costs 
D) cost of holding the wrong products

Question 14

The bullwhip effect suggests that ______.

Accepted Answer

A) changes in consumer demand are magnified as one moves upstream in the supply chain 
B) changes in consumer demand are minimized as one moves upstream in the supply chain 
C) changes in consumer demand are constant as one moves downstream in the supply chain 
D) changes in consumer demand are magnified as one moves downstream in the supply chain 
A) changes in consumer demand are magnified as one moves upstream in the supply chain 
B) changes in consumer demand are minimized as one moves upstream in the supply chain 
C) changes in consumer demand are constant as one moves downstream in the supply chain 
D) changes in consumer demand are magnified as one moves downstream in the supply chain

Question 15

Which of the following is NOT a problem that inventory turnover can alert managers to?

Accepted Answer

A) overstocking 
B) product obsolescence 
C) impending stock-out situations 
D) increasing production costs 
A) overstocking 
B) product obsolescence 
C) impending stock-out situations 
D) increasing production costs

Question 16

Disintermediation ______.

Accepted Answer

A) is used to prevent information distortion in a supply chain 
B) refers to a downstream supply chain member selling directly to an upstream supply chain member 
C) is one method to avoid or reduce seasonality of demand 
D) is when a supplier of raw materials sells products directly to the end consumer 
A) is used to prevent information distortion in a supply chain 
B) refers to a downstream supply chain member selling directly to an upstream supply chain member 
C) is one method to avoid or reduce seasonality of demand 
D) is when a supplier of raw materials sells products directly to the end consumer

Question 17

Which of the following is NOT one of the three basic types of inventory control systems?

Accepted Answer

A) single-period system 
B) multi-period system 
C) continuous review system 
D) periodic review system 
A) single-period system 
B) multi-period system 
C) continuous review system 
D) periodic review system

Question 18

The objective of inventory management in the airline industry is ______.

Accepted Answer

A) to maximize the total revenues generated by the mix of fare classes sold for a flight 
B) to ensure seats are cleaned 
C) to provide the highest quality of service 
D) nonexistent,as there is no inventory relevant to air transportation 
A) to maximize the total revenues generated by the mix of fare classes sold for a flight 
B) to ensure seats are cleaned 
C) to provide the highest quality of service 
D) nonexistent,as there is no inventory relevant to air transportation

Question 19

Shortage costs refer to ______.

Accepted Answer

A) ordering costs 
B) setup costs 
C) stock-out costs 
D) purchasing costs 
A) ordering costs 
B) setup costs 
C) stock-out costs 
D) purchasing costs

Question 20

Inventory turnover is ______.

Accepted Answer

A) a measure of how frequently a business sells its inventory in a given time period 
B) calculated as the ratio of the cost of goods sold to the average manufacturing cost 
C) calculated as the ratio of the cost of goods returned by customers to cost of goods sold to customers 
D) calculated as the product of the cost of goods returned by customers to cost of goods sold to customers 
A) a measure of how frequently a business sells its inventory in a given time period 
B) calculated as the ratio of the cost of goods sold to the average manufacturing cost 
C) calculated as the ratio of the cost of goods returned by customers to cost of goods sold to customers 
D) calculated as the product of the cost of goods returned by customers to cost of goods sold to customers

Exam 18: Inventory Management

Major categories of inventory-related costs include ______.

In a single-period system,______.

VMI is ______.

Which of the following is NOT associated with cycle counting?

To achieve the goals of inventory management,operations managers should ask this: ______.

Which of the following is usually NOT a reason to hold inventory?

Holding costs can be expressed as ______.

Which of the following is NOT a benefit of cycle counting?

When we apply the ABC classification to cycle counting,we would ______.

Which of the following is least consistent with sustainability practices in inventory management?

Which of the following is true with regard to fill rates and inventory?

Anticipation inventory is ______.

Which of the following is NOT a type of inventory-related costs?

The bullwhip effect suggests that ______.

Which of the following is NOT a problem that inventory turnover can alert managers to?

Disintermediation ______.

Which of the following is NOT one of the three basic types of inventory control systems?

The objective of inventory management in the airline industry is ______.

Shortage costs refer to ______.

Inventory turnover is ______.

Introduction to Managing Global Operations and Supply Chains

Operations and Supply Chain Strategies

Project Management

Supplement: Project Management

Product and Service Innovations

Supplement: Reliability

Managing for Quality

Quality Improvement and Control Tools

Capacity Planning

Supply Chain Design and Location Planning

Process Design and Layout Planning

Supplement: Tools for Analyzing, Designing, and Selecting Processes and Layouts

Supplier Management

Logistics Management

Demand Management and Customer Service

Demand Forecasting Methods

Lean Operations and Supply Chains

Inventory Control Models

Sales and Operations Planning

Master Scheduling and Material Requirements Planning

Supplement: Capacity Requirements Planning, MRP II, ERP, and DRP

Detailed Scheduling

Linear Programming

The Transportation Models

Waiting Line Models

Simulation

Learning Curves

Decision-Making Tools

Filters