Question 1

Holding costs may include:

Accepted Answer

A) cost of warehouse space. 
B) record keeping. 
C) insurance. 
D) taxes. 
E) All of the above. 
A) cost of warehouse space. 
B) record keeping. 
C) insurance. 
D) taxes. 
E) All of the above.

Question 2

Which of the following is not an assumption of the (R,Q)model?

Accepted Answer

A) Each application involves a single stable product. 
B) The inventory level is under continuous review. 
C) The only decisions to be made are to choose R and Q. 
D) The lead time is fixed. 
E) If a stockout occurs,the excess demand is backlogged. 
A) Each application involves a single stable product. 
B) The inventory level is under continuous review. 
C) The only decisions to be made are to choose R and Q. 
D) The lead time is fixed. 
E) If a stockout occurs,the excess demand is backlogged.

Question 3

In the perishable product model,the service level is the probability that demand will not exceed the stocking level.

Accepted Answer

A) True 
 B)False

Question 4

When the item is used in production or is a spare part for a production machine,shortage costs in the perishable product model include the cost of lost production.

Accepted Answer

A) True 
 B)False

Question 5

Which one of these would not be a factor in determining the reorder point?

Accepted Answer

A) The EOQ. 
B) The lead time. 
C) The average demand. 
D) Holding costs. 
E) All are factors. 
A) The EOQ. 
B) The lead time. 
C) The average demand. 
D) Holding costs. 
E) All are factors.

Question 6

If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0.3,0.3,0.2,and 0.2 respectively,what is the service level if two units are stocked?

Accepted Answer

A) 0.2. 
B) 0.3 
C) 0.5. 
D) 0.6. 
E) 0.8. 
A) 0.2. 
B) 0.3 
C) 0.5. 
D) 0.6. 
E) 0.8.

Question 7

The ABC control method involves classifying items by unit cost.

Accepted Answer

A) True 
 B)False

Question 8

A two-bin system is an example of a continuous review inventory system.

Accepted Answer

A) True 
 B)False

Question 9

Which one of the following is not generally a determinant of the reorder point?

Accepted Answer

A) Average demand. 
B) Length of lead time. 
C) Setup cost. 
D) Shortage cost. 
E) Purchase cost. 
A) Average demand. 
B) Length of lead time. 
C) Setup cost. 
D) Shortage cost. 
E) Purchase cost.

Question 10

Which of these products would be most apt to involve the use of a perishable product model?

Accepted Answer

A) Gold coins. 
B) Hammers. 
C) Fresh fish. 
D) Calculators. 
E) Frozen corn. 
A) Gold coins. 
B) Hammers. 
C) Fresh fish. 
D) Calculators. 
E) Frozen corn.

Question 11

Which of the following is not an assumption of the perishable product model?

Accepted Answer

A) Each application involves a single time period. 
B) It is possible to dispose of any units of the product remaining at the end of the period. 
C) The only decision to be made is how many units to order. 
D) The probability distribution of demand is unknown. 
E) There are costs incurred for both underordering and overordering. 
A) Each application involves a single time period. 
B) It is possible to dispose of any units of the product remaining at the end of the period. 
C) The only decision to be made is how many units to order. 
D) The probability distribution of demand is unknown. 
E) There are costs incurred for both underordering and overordering.

Question 12

The rate of demand is an important factor in determining the reorder point.

Accepted Answer

A) True 
 B)False

Question 13

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds,two fundamental decisions must be made about inventory: the timing and size of orders.

Accepted Answer

A) True 
 B)False

Question 14

Service level can be measured by:

Accepted Answer

A) the probability that a stockout will not occur during lead time. 
B) The average number of stockouts per year. 
C) The average delay in filling backorders. 
D) The average percentage of annual demand that can be satisfied immediately. 
E) All of the above. 
A) the probability that a stockout will not occur during lead time. 
B) The average number of stockouts per year. 
C) The average delay in filling backorders. 
D) The average percentage of annual demand that can be satisfied immediately. 
E) All of the above.

Question 15

The need for safety stocks can be reduced by an operation strategy which:

Accepted Answer

A) increases lead time. 
B) increases lot sizes. 
C) decreases ordering costs. 
D) decreases lead time variability. 
E) None of the above. 
A) increases lead time. 
B) increases lot sizes. 
C) decreases ordering costs. 
D) decreases lead time variability. 
E) None of the above.

Question 16

The choice of the distribution to use as the demand distribution has little effect on the reorder point.

Accepted Answer

A) True 
 B)False

Question 17

The reorder point equals the average sales during lead time plus the number of backlogged items.

Accepted Answer

A) True 
 B)False

Question 18

If average demand for an inventory item is 200 units per day,lead time is three days,and safety stock is 100 units,the reorder point is:

Accepted Answer

A) 100 units. 
B) 200 units. 
C) 300 units. 
D) 600 units. 
E) 700 units. 
A) 100 units. 
B) 200 units. 
C) 300 units. 
D) 600 units. 
E) 700 units.

Question 19

In the ABC control method,items that have high unit costs are always classified as A items.

Accepted Answer

A) True 
 B)False

Question 20

A multiechelon inventory system is a system with multiple echelons of inventory where each echelon is used to replenish the inventories at the various sites of the next lower echelon.

Accepted Answer

A) True 
 B)False

Exam 22: CD - Inventory Management With Uncertain Demand

Holding costs may include:

Which of the following is not an assumption of the (R,Q)model?

In the perishable product model,the service level is the probability that demand will not exceed the stocking level.

When the item is used in production or is a spare part for a production machine,shortage costs in the perishable product model include the cost of lost production.

Which one of these would not be a factor in determining the reorder point?

If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0.3,0.3,0.2,and 0.2 respectively,what is the service level if two units are stocked?

The ABC control method involves classifying items by unit cost.

A two-bin system is an example of a continuous review inventory system.

Which one of the following is not generally a determinant of the reorder point?

Which of these products would be most apt to involve the use of a perishable product model?

Which of the following is not an assumption of the perishable product model?

The rate of demand is an important factor in determining the reorder point.

To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds,two fundamental decisions must be made about inventory: the timing and size of orders.

Service level can be measured by:

The need for safety stocks can be reduced by an operation strategy which:

The choice of the distribution to use as the demand distribution has little effect on the reorder point.

The reorder point equals the average sales during lead time plus the number of backlogged items.

If average demand for an inventory item is 200 units per day,lead time is three days,and safety stock is 100 units,the reorder point is:

In the ABC control method,items that have high unit costs are always classified as A items.

A multiechelon inventory system is a system with multiple echelons of inventory where each echelon is used to replenish the inventories at the various sites of the next lower echelon.

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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