Question 1

Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods?

Accepted Answer

A) EOQ. 
B) Continuous review. 
C) Perishable product. 
D) Quantity discounts. 
E) (R,Q). 
A) EOQ. 
B) Continuous review. 
C) Perishable product. 
D) Quantity discounts. 
E) (R,Q). C

Question 2

Service level can be stated in terms of an order cycle or as an annual amount.

Accepted Answer

A) True 
 B)False  True

Question 3

The goal of the perishable product model is to identify the order quantity that will minimize the shortage costs.

Accepted Answer

A) True 
 B)False  False

Question 4

The average demand for an item is 20 units per day,safety stock is 50 units,and lead time is four days,the reorder point will be:

Accepted Answer

A) 20. 
B) 50. 
C) 70. 
D) 80. 
E) 130. 
A) 20. 
B) 50. 
C) 70. 
D) 80. 
E) 130.

Question 5

The EOQ and (R,Q)models are appropriate if unused items can be carried over into subsequent time periods.

Accepted Answer

A) True 
 B)False

Question 6

Two main concerns of inventory control relate to the costs and the level of customer service.

Accepted Answer

A) True 
 B)False

Question 7

The perishable product model can be very helpful in determining how much to order.

Accepted Answer

A) True 
 B)False

Question 8

One consequence of uncertain demand is the risk of incurring shortages.

Accepted Answer

A) True 
 B)False

Question 9

(R,Q)policies indicate to managers the time between orders.

Accepted Answer

A) True 
 B)False

Question 10

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

Accepted Answer

A) True 
 B)False

Question 11

The perishable product model can be very helpful in determining when to order.

Accepted Answer

A) True 
 B)False

Question 12

Estimating shortage costs requires a managerial assessment.

Accepted Answer

A) True 
 B)False

Question 13

The cost of overordering is the decrease in profit that results from failing to order a unit that could have been sold during the period.

Accepted Answer

A) True 
 B)False

Question 14

The service level in a perishable product model is the probability that no shortage will occur.

Accepted Answer

A) True 
 B)False

Question 15

A company's supply chain consists of the flow of materials and information from suppliers,through production,to the end users.
Multiple Choice Questions

Accepted Answer

A) True 
 B)False

Question 16

In a perishable products model,if the cost of underordering is four times the cost of overordering,then the optimum service level is:

Accepted Answer

A) 1. 
B) 0.8. 
C) 0.6. 
D) 0.4. 
E) 0.2. 
A) 1. 
B) 0.8. 
C) 0.6. 
D) 0.4. 
E) 0.2.

Question 17

Customer service level and risk of a stockout are related.

Accepted Answer

A) True 
 B)False

Question 18

Holding backorders when shortages occur and then filling them when inventory is replenished is referred to as shortordering.

Accepted Answer

A) True 
 B)False

Question 19

Shortage costs are easily quantified.

Accepted Answer

A) True 
 B)False

Question 20

In a perishable products model,if shortage and excess costs are equal,then the optimum service level is:

Accepted Answer

A) 0. 
B) 0.33. 
C) 0.5. 
D) 0.67. 
E) 1. 
A) 0. 
B) 0.33. 
C) 0.5. 
D) 0.67. 
E) 1.

Exam 22: CD - Inventory Management With Uncertain Demand

Which inventory model is most appropriate if unused or unsold items cannot be carried over to subsequent periods?

Service level can be stated in terms of an order cycle or as an annual amount.

The goal of the perishable product model is to identify the order quantity that will minimize the shortage costs.

The average demand for an item is 20 units per day,safety stock is 50 units,and lead time is four days,the reorder point will be:

The EOQ and (R,Q)models are appropriate if unused items can be carried over into subsequent time periods.

Two main concerns of inventory control relate to the costs and the level of customer service.

The perishable product model can be very helpful in determining how much to order.

One consequence of uncertain demand is the risk of incurring shortages.

(R,Q)policies indicate to managers the time between orders.

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

The perishable product model can be very helpful in determining when to order.

Estimating shortage costs requires a managerial assessment.

The cost of overordering is the decrease in profit that results from failing to order a unit that could have been sold during the period.

The service level in a perishable product model is the probability that no shortage will occur.

A company's supply chain consists of the flow of materials and information from suppliers,through production,to the end users. Multiple Choice Questions

In a perishable products model,if the cost of underordering is four times the cost of overordering,then the optimum service level is:

Customer service level and risk of a stockout are related.

Holding backorders when shortages occur and then filling them when inventory is replenished is referred to as shortordering.

Shortage costs are easily quantified.

In a perishable products model,if shortage and excess costs are equal,then the optimum service level is:

Introduction

Linear Programming: Basic Concepts

Linear Programming: Formulation and Applications

The Art of Modeling With Spreadsheets

What-If Analysis for Linear Programming

Network Optimization Problems

Using Binary Integer Programming to Deal With Yes-Or-No Decisions

Nonlinear Programming

Decision Analysis

Cd Supplement - Decision Analysis

Forecasting

Queueing Models

CD Supplement - Additional Queueing Models

Computer Simulation: Basic Concepts

CD Supplement - the Inverse Transformation Method for Generating Random Observations

Computer Simulation With Crystal Ball

CD - Solution Concepts for Linear Programming

CD - Transportation and Assignment Problems

CD - Pertcpm Models for Project Management

CD - Goal Programming

CD - Inventory Management With Known Demand

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