Question 1

When demand and lead time are constant,reorder point is the demand during lead time.

Accepted Answer

A) True 
 B)False  True

Question 2

Name and briefly describe the four basic types of inventory.

Accepted Answer

a.Raw materials − unprocessed,purchased inventory.
b.Work-in-process − partially processed inventory.
c.Finished goods − inventory or materials that have been completely processed or assembled,ready for sales or shipping to customers.
d.Maintenance,repairs and operating (MRO)supplies − (e.g.,lubrication)goods used in the manufacturing process,but do not become parts of the finished goods.

Question 3

The EOQ model with quantity discounts attempts to determine

Accepted Answer

A) what is the lowest purchasing price. 
B) whether to use fixed-quantity or fixed period order policy. 
C) how many units should be ordered. 
D) what is the shortest lead time. 
E) what is the lowest amount of inventory necessary to satisfy a certain service level. 
A) what is the lowest purchasing price. 
B) whether to use fixed-quantity or fixed period order policy. 
C) how many units should be ordered. 
D) what is the shortest lead time. 
E) what is the lowest amount of inventory necessary to satisfy a certain service level. C

Question 4

The primary purpose of the basic economic order quantity model is

Accepted Answer

A) to calculate the reorder point, so that replenishments take place at the proper time 
B) to minimize the sum of carrying cost and holding cost 
C) to maximize the customer service level 
D) to minimize the sum of setup cost and holding cost 
E) to calculate the optimum safety stock 
A) to calculate the reorder point, so that replenishments take place at the proper time 
B) to minimize the sum of carrying cost and holding cost 
C) to maximize the customer service level 
D) to minimize the sum of setup cost and holding cost 
E) to calculate the optimum safety stock

Question 5

Dependent demand and independent demand items differ in that
I.for any product,all components are dependent-demand items
II.the need for independent-demand items is forecast
III.the need for dependent-demand items is calculated

Accepted Answer

A) I only 
B) I & II only 
C) I & III only 
D) II & III only 
E) I, II & III 
A) I only 
B) I & II only 
C) I & III only 
D) II & III only 
E) I, II & III

Question 6

An RFID reader does not require direct line of sight to read the information stored in an RFID tag.

Accepted Answer

A) True 
 B)False

Question 7

The UNLV Bookstore sells a unique calculator to college students.The demand for this calculator has a normal distribution with an average daily demand of 20 units and a standard deviation of 4 units per day.The lead time for this calculator is very stable at 9 days.Compute the statistical reorder point that results in a 95 percent in-stock probability (Z = 1.65).

Accepted Answer

A) 19.8 units 
B) 80 units 
C) 180 units 
D) 199.8 units 
E) 720 units 
A) 19.8 units 
B) 80 units 
C) 180 units 
D) 199.8 units 
E) 720 units

Question 8

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

Accepted Answer

A) Your fixed lot size was lower than the EOQ 
B) Your fixed lot size was equal to the EOQ 
C) Your fixed lot size was higher than the EOQ 
D) Nothing because there is insufficient information to discern where the EOQ would be. 
A) Your fixed lot size was lower than the EOQ 
B) Your fixed lot size was equal to the EOQ 
C) Your fixed lot size was higher than the EOQ 
D) Nothing because there is insufficient information to discern where the EOQ would be.

Question 9

List four assumptions of the EOQ model.

Accepted Answer

a.Demand must be known and constant
b.De

Question 10

Pareto Analysis is an inventory model used to determine the optimal order size that minimizes total annual inventory costs.

Accepted Answer

A) True 
 B)False

Question 11

ABC Inventory Matrix
Use the graph below to answer the question(s).  
-In the ABC Inventory Matrix,inventory in area Z suggests

Accepted Answer

A) under-stocked A and B items. 
B) under-stocked B and C items. 
C) overstocked A and B items. 
D) over-stocked B and C items. 
E) inventory matches sales. 
A) under-stocked A and B items. 
B) under-stocked B and C items. 
C) overstocked A and B items. 
D) over-stocked B and C items. 
E) inventory matches sales.

Question 12

Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period.Faster turnovers are generally viewed as negative because it indicates instability in the firm's inventory level.

Accepted Answer

A) True 
 B)False

Question 13

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Accepted Answer

A) True 
 B)False

Question 14

Service parts sold to the repair shops are examples of dependent demand.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not an example of an ordering cost for products purchased from a supplier?

Accepted Answer

A) the cost of transmitting the order 
B) the cost of receiving the product 
C) the cost associated with processing the invoice 
D) the cost of pilferage while in storage 
E) the cost of clerical staff for preparing the purchase 
A) the cost of transmitting the order 
B) the cost of receiving the product 
C) the cost associated with processing the invoice 
D) the cost of pilferage while in storage 
E) the cost of clerical staff for preparing the purchase

Question 16

When demand and delivery lead time are known and constant,reorder point is the ____.

Accepted Answer

A) demand during lead time 
B) safety stock 
C) sum of demand during lead time and safety stock 
D) economic order quantity 
E) average inventory 
A) demand during lead time 
B) safety stock 
C) sum of demand during lead time and safety stock 
D) economic order quantity 
E) average inventory

Question 17

What inventory factor may be omitted from the basic EOQ derivation because it is a constant?

Accepted Answer

A) Annual order-processing cost 
B) Annual purchase cost of goods 
C) Annual capital cost 
D) Annual setup costs 
E) all of these 
A) Annual order-processing cost 
B) Annual purchase cost of goods 
C) Annual capital cost 
D) Annual setup costs 
E) all of these

Question 18

When both the demand and lead time of a product are variable,firms keep a higher safety stock level when compared to variations in only the demand or only the lead time.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following cannot be considered as independent demand items?

Accepted Answer

A) wholesale and retail merchandise items 
B) maintenance, repair, and operating supplies at a manufacturing company 
C) maintenance, repair, and operating supplies at a service firm 
D) raw material items that become part of the final product at a manufacturing firm 
E) service industry items such as hospital supplies or office supplies for law firms 
A) wholesale and retail merchandise items 
B) maintenance, repair, and operating supplies at a manufacturing company 
C) maintenance, repair, and operating supplies at a service firm 
D) raw material items that become part of the final product at a manufacturing firm 
E) service industry items such as hospital supplies or office supplies for law firms

Question 20

When demand and delivery lead time are known and constant,and demand is eight per day,and purchase lead time is four days,the reorder point is:

Accepted Answer

A) 3. 
B) 8. 
C) 32. 
D) 35. 
E) 56. 
A) 3. 
B) 8. 
C) 32. 
D) 35. 
E) 56.

When demand and lead time are constant,reorder point is the demand during lead time.

Name and briefly describe the four basic types of inventory.

The EOQ model with quantity discounts attempts to determine

The primary purpose of the basic economic order quantity model is

Dependent demand and independent demand items differ in that I.for any product,all components are dependent-demand items II.the need for independent-demand items is forecast III.the need for dependent-demand items is calculated

An RFID reader does not require direct line of sight to read the information stored in an RFID tag.

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

List four assumptions of the EOQ model.

Pareto Analysis is an inventory model used to determine the optimal order size that minimizes total annual inventory costs.

ABC Inventory Matrix Use the graph below to answer the question(s). -In the ABC Inventory Matrix,inventory in area Z suggests

Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period.Faster turnovers are generally viewed as negative because it indicates instability in the firm's inventory level.

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Service parts sold to the repair shops are examples of dependent demand.

Which of the following is not an example of an ordering cost for products purchased from a supplier?

When demand and delivery lead time are known and constant,reorder point is the ____.

What inventory factor may be omitted from the basic EOQ derivation because it is a constant?

When both the demand and lead time of a product are variable,firms keep a higher safety stock level when compared to variations in only the demand or only the lead time.

Which of the following cannot be considered as independent demand items?

When demand and delivery lead time are known and constant,and demand is eight per day,and purchase lead time is four days,the reorder point is:

Introduction to Supply Chain Management

Purchasing Management

Creating and Managing Supplier Relationship

Ethical and Sustainable Sourcing

Demand Forecasting

Resource Planning Systems

Process Management - Lean and Six Sigma in the Supply Chain

Domestic Usand Global Logistics

Customer Relationship Management

Global Location Decisions

Service Response Logistics

Supply Chain Process Integration

Performance Measurement Along the Supply Chain

Filters

Exam 7: Inventory Management

When demand and lead time are constant,reorder point is the demand during lead time.

Name and briefly describe the four basic types of inventory.

The EOQ model with quantity discounts attempts to determine

The primary purpose of the basic economic order quantity model is

Dependent demand and independent demand items differ in that I.for any product,all components are dependent-demand items II.the need for independent-demand items is forecast III.the need for dependent-demand items is calculated

An RFID reader does not require direct line of sight to read the information stored in an RFID tag.

If your company had an annual purchase cost of items equal to $2,000,000,an annual holding cost of $150,000 and an annual ordering cost of $750,000 this scenario would reveal that:

List four assumptions of the EOQ model.

Pareto Analysis is an inventory model used to determine the optimal order size that minimizes total annual inventory costs.

ABC Inventory Matrix Use the graph below to answer the question(s). -In the ABC Inventory Matrix,inventory in area Z suggests

Inventory turnover ratio shows how many times a firm turns over its inventory in an accounting period.Faster turnovers are generally viewed as negative because it indicates instability in the firm's inventory level.

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Service parts sold to the repair shops are examples of dependent demand.

Which of the following is not an example of an ordering cost for products purchased from a supplier?

When demand and delivery lead time are known and constant,reorder point is the ____.

What inventory factor may be omitted from the basic EOQ derivation because it is a constant?

When both the demand and lead time of a product are variable,firms keep a higher safety stock level when compared to variations in only the demand or only the lead time.

Which of the following cannot be considered as independent demand items?

When demand and delivery lead time are known and constant,and demand is eight per day,and purchase lead time is four days,the reorder point is:

Introduction to Supply Chain Management

Purchasing Management

Creating and Managing Supplier Relationship

Ethical and Sustainable Sourcing

Demand Forecasting

Resource Planning Systems

Process Management - Lean and Six Sigma in the Supply Chain

Domestic Usand Global Logistics

Customer Relationship Management

Global Location Decisions

Service Response Logistics

Supply Chain Process Integration

Performance Measurement Along the Supply Chain

Filters