Question 1

Demand that is stable over time is called ____.

Accepted Answer

A) Static 
B) Dynamic 
C) Stochastic 
D) Deterministic 
A) Static 
B) Dynamic 
C) Stochastic 
D) Deterministic

Question 2

In general, total ordering costs are equal to total inventory holding cost for the optimal solution to the EOQ model.

Accepted Answer

A) True 
 B)False

Question 3

A 4th of July celebration T-shirt for this year will cost festival organizers $12 each and will sell for $25 before and on July 4th.Any unsold T-shirts can usually be disposed of at a discount after the festival for $5 each.If demand is normally distributed with a mean of 1,800 T-shirts and a standard deviation of 75, how many T-shirts should be ordered?

Accepted Answer

c_u = 25 - 12 = 13 c

Question 4

Dependent demand, unlike independent demand, needs to be forecasted.

Accepted Answer

A) True 
 B)False

Question 5

Inventory that acts as a buffer between workstations in flow shops or departments in job shops is called ____ inventory.

Accepted Answer

A) Raw materials 
B) Work-in-process 
C) Cycle stock 
D) Safety stock 
A) Raw materials 
B) Work-in-process 
C) Cycle stock 
D) Safety stock

Question 6

Because the fixed quantity system orders the same amount each time, time between orders will be constant, even with variable demand.

Accepted Answer

A) True 
 B)False

Question 7

Bishop Manufacturing is implementing an economic order quality (EOQ) inventory control system and needs a good estimate of the cost to process a purchase order (PO).It takes 5 total labor hours to process a PO.The average number of SKUs on a PO is 2.2.The average wage for people working in the purchasing department is $22 per hour plus employee benefits of $3 per hour.Fixed costs for the purchasing department are $250,000 per year assuming a 2,000 hour per employee per year work week.Given this information a good estimate of the cost to process one purchase order is

Accepted Answer

C_o = [($22

Question 8

An airline seat is an example of an asset held for future use or sale.

Accepted Answer

A) True 
 B)False

Question 9

"The inability to satisfy the demand for an item" is the definition of a

Accepted Answer

A) reorder point 
B) stockout 
C) lost sale 
D) backorder 
A) reorder point 
B) stockout 
C) lost sale 
D) backorder

Question 10

Provide some examples of when the single period inventory model is applicable.

Accepted Answer

The single-period inventory model applie

Question 11

Two fundamental inventory decisions are when to order and how much to order.Which of the following statement is true with respect to Fixed Quantity (FQS) and Fixed Period (FPS) inventory systems?

Accepted Answer

A) A FPS orders a fixed period quantity when the inventory position reaches or drops below the reorder point (r). 
B) A FPS must cover a time period of T + L to cover the risk of a stock out. 
C) A FPS places an order for the economic order quantity every T time units. 
D) A FQS places an order to replenish the inventory position up to a target level (M) when the inventory position reaches the reorder point (r). 
A) A FPS orders a fixed period quantity when the inventory position reaches or drops below the reorder point (r). 
B) A FPS must cover a time period of T + L to cover the risk of a stock out. 
C) A FPS places an order for the economic order quantity every T time units. 
D) A FQS places an order to replenish the inventory position up to a target level (M) when the inventory position reaches the reorder point (r).

Question 12

RFID tags are often used to track stock keeping units in supply chains.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a key input to a single period inventory model?

Accepted Answer

A) Probability distribution of demand 
B) Probability that demand is less than the optimal order quantity 
C) Cost per item of overestimating demand 
D) Cost per item of underestimating demand 
A) Probability distribution of demand 
B) Probability that demand is less than the optimal order quantity 
C) Cost per item of overestimating demand 
D) Cost per item of underestimating demand

Question 14

Given the information below, conduct an ABC analysis and determine which items should be classified as A, B and c.

Accepted Answer

@#IMG-DLM&
 Based on this information, w

Question 15

Overnight shipping for emergency orders and compensation for overbooking at a hotel are examples of ordering costs.

Accepted Answer

A) True 
 B)False

Question 16

The Economic Order Quantity model (EOQ) allows for variable lead-time.

Accepted Answer

A) True 
 B)False

Question 17

Given the information below, conduct an ABC analysis and suggest which items should be classified as A, B and c.

Accepted Answer

@#IMG-DLM&  From this table, an A-item classificat

Question 18

In ABC inventory analysis, which of the following is true for "C" items?

Accepted Answer

A) Tighter control of "C" items (than for "A" or "B" items) is appropriate. 
B) "C" items are critical items that must be monitored with a fixed period system. 
C) "C" items make up a lower percentage of total inventory value ($) than either "A" or "B" items. 
D) "C" items make up 10-20 percent of inventory items. 
A) Tighter control of "C" items (than for "A" or "B" items) is appropriate. 
B) "C" items are critical items that must be monitored with a fixed period system. 
C) "C" items make up a lower percentage of total inventory value ($) than either "A" or "B" items. 
D) "C" items make up 10-20 percent of inventory items.

Question 19

Costs associated with backordering a product are called ____ costs.

Accepted Answer

A) Holding 
B) Shortage 
C) Ordering 
D) Setup 
A) Holding 
B) Shortage 
C) Ordering 
D) Setup

Question 20

Alice opens an aquarium store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want.She decides to experiment with inventory control methods such as using a fixed order quantity (FQS) and/or fixed order period (FPS) systems.The FLUVAL 303 Pump, a high margin and profitable pump, is one of her best sellers but it stocks out frequently.You collect the following date with respect to this pump's sales.
Demand = 5 units per week	
Store open 50 weeks/year
Order cost = $40/order	
Lead-time = 3 weeks
Item cost = $80/pump	
Inventory holding cost = 15% per year	
a.What is the Economic Order Quantity (EOQ) rounded to the next highest number?
b.If the current order quantity used by Alice is 20 pumps per order, how much money can she save annually by adopting an EOQ ordering policy?
c.If Alice decides to use a FPS, what is the economic fixed order interval?

Accepted Answer

a.Q* = Sq.root of [2(250)(40)/12] = 40.8

Demand that is stable over time is called ____.

In general, total ordering costs are equal to total inventory holding cost for the optimal solution to the EOQ model.

Dependent demand, unlike independent demand, needs to be forecasted.

Inventory that acts as a buffer between workstations in flow shops or departments in job shops is called ____ inventory.

Because the fixed quantity system orders the same amount each time, time between orders will be constant, even with variable demand.

An airline seat is an example of an asset held for future use or sale.

"The inability to satisfy the demand for an item" is the definition of a

Provide some examples of when the single period inventory model is applicable.

Two fundamental inventory decisions are when to order and how much to order.Which of the following statement is true with respect to Fixed Quantity (FQS) and Fixed Period (FPS) inventory systems?

RFID tags are often used to track stock keeping units in supply chains.

Which of the following is not a key input to a single period inventory model?

Given the information below, conduct an ABC analysis and determine which items should be classified as A, B and c.

Overnight shipping for emergency orders and compensation for overbooking at a hotel are examples of ordering costs.

The Economic Order Quantity model (EOQ) allows for variable lead-time.

Given the information below, conduct an ABC analysis and suggest which items should be classified as A, B and c.

In ABC inventory analysis, which of the following is true for "C" items?

Costs associated with backordering a product are called ____ costs.

Goods, Services, and Operations Management

Value Chains

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Design

Supply Chain Design

Capacity Management

Forecasting and Demand Planning

Resource Management

Operations Scheduling and Sequencing

Quality Management

Quality Control and Spc

Lean Operating Systems

Project Management

Work Measurement, Learning Curves, and Standards

Queuing Analysis

Modeling Using Linear Programming

Simulation

Decision Analysis

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Exam 12: Managing Inventories

Demand that is stable over time is called ____.

In general, total ordering costs are equal to total inventory holding cost for the optimal solution to the EOQ model.

Dependent demand, unlike independent demand, needs to be forecasted.

Inventory that acts as a buffer between workstations in flow shops or departments in job shops is called ____ inventory.

Because the fixed quantity system orders the same amount each time, time between orders will be constant, even with variable demand.

An airline seat is an example of an asset held for future use or sale.

"The inability to satisfy the demand for an item" is the definition of a

Provide some examples of when the single period inventory model is applicable.

Two fundamental inventory decisions are when to order and how much to order.Which of the following statement is true with respect to Fixed Quantity (FQS) and Fixed Period (FPS) inventory systems?

RFID tags are often used to track stock keeping units in supply chains.

Which of the following is not a key input to a single period inventory model?

Given the information below, conduct an ABC analysis and determine which items should be classified as A, B and c.

Overnight shipping for emergency orders and compensation for overbooking at a hotel are examples of ordering costs.

The Economic Order Quantity model (EOQ) allows for variable lead-time.

Given the information below, conduct an ABC analysis and suggest which items should be classified as A, B and c.

In ABC inventory analysis, which of the following is true for "C" items?

Costs associated with backordering a product are called ____ costs.

Goods, Services, and Operations Management

Value Chains

Measuring Performance in Operations

Operations Strategy

Technology and Operations Management

Goods and Service Design

Process Selection, Design, and Analysis

Facility and Work Design

Supply Chain Design

Capacity Management

Forecasting and Demand Planning

Resource Management

Operations Scheduling and Sequencing

Quality Management

Quality Control and Spc

Lean Operating Systems

Project Management

Work Measurement, Learning Curves, and Standards

Queuing Analysis

Modeling Using Linear Programming

Simulation

Decision Analysis

Filters