Exam 18: Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

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The following information is available for Wilson Trailer Company, which sells two products: Trailer A Trailer B Processing time 2 hours 4 hours Vinyl cover used 16\cdot. 12.. Selling price \ 50.00 \ 80.00 Variable cost \ 35.00 \ 50.00 Fixerl cost \ 10.00 \ 20.00 There are 100 hours available in the plant and 75 square metres of vinyl available per operating period. -Refer to the figure.What is the constraint equation representing the materials available for the production processes?

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Air Frame Corporation increased the size of several inventory order quantities that had previously been determined using the EOQ model.What is the impact on the total annual ordering costs?

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Burley Company has the following information available concerning one of its inventory items: Cost of placing an order \ 50.00 Unit carrying cost per year \ 2.00 Annual unit demand 3,200 Safety stock 80 Average daily demand 10 Normal lead time in days 12 -Refer to the figure.What is the cost of placing an order?

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Burley Company has the following information available concerning one of its inventory items: Cost of placing an order \ 50.00 Unit carrying cost per year \ 2.00 Annual unit demand 3,200 Safety stock 80 Average daily demand 10 Normal lead time in days 12 -Refer to the figure.The company operates 200 days a year,the lead time for the item is 10 days,and the safety stock is 100 units.What is the reorder point?

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Waterhouse Company decreased the size of inventory order quantities that had previously been determined using the EOQ model.If demand remains the same,what is the impact on the number of orders made during the year?

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Smith Products Corporation produces two products.The manufacture of these products is partially automated.Total available labour hours are 400,and the total available machine hours are 600.Time requirements and contribution margins per unit for each product are as follows: Praduct X Praduct Y Labour hours 2 3 Machine hours 4 2 Contribution margin per unit \ 5 \ 4 a.What is the equation to be maximized? b.What are the equations that express the constraints? c.What is the greatest number of units of A that can be produced given the constraints? d.What is the optimal solution?

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A linear programming problem has an objective function of 10X + 12Y.If the optimal solution provided by the model is to produce and sell 400 units of X and 1,000 units of Y,what is the expected return?

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How are the objectives of JIT achieved?

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Hassel Company manufactures two different products, X and Y. The company has 100 kilograms of materials and 300 direct labour hours available for production. The time requirements and contribution margins per unit are as follows: Product X Product Y Contribution margin per unit \ 4 \ 5 Materials per unit (kg) 1 2 Direct labour hours per unit 4 2 -Refer to the figure.What is the objective function for maximizing profits?

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Which of the following is a carrying cost?

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One of the traditional reasons for holding inventory is to take advantage of quantity discounts and hedge against future price increases.What is the JIT solution meant to do?

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Burley Company has the following information available concerning one of its inventory items: Cost of placing an order \ 50.00 Unit carrying cost per year \ 2.00 Annual unit demand 3,200 Safety stock 80 Average daily demand 10 Normal lead time in days 12 -Refer to the figure.If there is a delay in shipping the item,approximately how many days can be covered by the safety stock?

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Heft Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labour hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: Product A Praduct B Labour hours per unit 5 2 Machine hours per unit 1 4 -Refer to the figure.What is the constraint on labour hours for Heft Company?

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Which of the following is not a cost readily identified with inventory management?

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Which of the following would be included in a linear programming model?

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Which of the following is NOT a step in the methodology for improving performance under the theory of constraints?

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What is the term for the cost of holding inventory?

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What is the term for a marker or card that specifies the quantity that the preceding process should manufacture?

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Which of the following is considered an ordering cost?

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What does a withdrawal Kanban specify?

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