Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The operations manager at a chemical company that produces insecticide for use in commercial applications is attempting to set a safety stock level for a key ingredient that is used in their most powerful product. She believes that demand during lead time for this ingredient is normally distributed based on past data. In addition, she believes that future use is accurately depicted by these historical demand-during-lead-time data in gallons): 55, 75, 75, 70, 80, 60, 50, 70, 60, and 85. She estimates the standard deviation of demand during the lead time to be 8.5 gallons.
a. What is the average demand during the lead time for this key ingredient?
b. What is the safety stock they need to provide a 95% service level?
c. What is the order point the company should use?

Accepted Answer

a. @#LAT-DLM&_L = (55 + 75 + 75 + 70 + 8

Question 3

Explain the difference between independent demand and dependent demand.

Accepted Answer

Independent demand is demand for a SKU t

Question 4

Marketing an operations generally prefer high inventory levels while finance would prefer small inventories.

Accepted Answer

A) True 
 B)False

Question 5

Inventory holding costs can be accurately measured by accounting departments.

Accepted Answer

A) True 
 B)False

Question 6

Discuss two types of stockouts.

Accepted Answer

When stockouts occur, the item is either

Question 7

Independent demand

Accepted Answer

A) can be derived/calculated 
B) is related to other SKUs 
C) is also called finished goods inventory 
D) needs to be forecasted 
A) can be derived/calculated 
B) is related to other SKUs 
C) is also called finished goods inventory 
D) needs to be forecasted

Question 8

Explain the different types of inventories maintained throughout a value chain.

Accepted Answer

Raw materials, component parts, subassem

Question 9

The owner of a garden supply store was wondering if they could manage their inventory better. She decided to develop an ABC classification system to help manage the inventory. The company's inventory consists of the following items:
 $$\begin{array} { c c c  } 
 \text { Garden Tool } & \text { Cost } & \text { Quarterly Demand units) } \
\hline \text { Shovel } & 5500 & 1,000 \
 \text { Edger } & \$ 25.00 & 6 \
 \text { Weeder } & \$ 6.00 & 400 \
\text { Hose } & \$ 20.00 & 800 \
 \text { Cutters } & \$ 4.00 & 100 \
 \text { Sprinkler } & \$ 7.00 & 800 \
 \text { Hedge Trimmer } & \$ 5.00 & 5,000 \
 \text { Spreader } & \$ 15.00 & 6 \
 \text { Sprayer } & \$ 12.00 & 20 \
 \text { Clippers } & \$ 8.00 & 15 \

\end{array}$$ 
a. Compute the total dollar value of each of the ten inventory items. What is the total value of all the inventory items?
b. Which items should be declared "A" items? What percentage of total inventory value does your "A" group represent? What percentage of the total number of inventory items does your "A" group represent?
c. Which items should be declared "B" items? What percentage of total inventory value does your "B" group represent? What percentage of the total number of inventory items does your "B" group represent?
d. Which items should be declared "C" items? What percentage of total inventory value does your "C" group represent? What percentage of the total number of inventory items does your "C" group represent?

Accepted Answer

a. \[\begin{array} { l c } 
\text { Tool

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

Explain the difference between independent demand and dependent demand.

Marketing an operations generally prefer high inventory levels while finance would prefer small inventories.

Inventory holding costs can be accurately measured by accounting departments.

Discuss two types of stockouts.

Independent demand

Explain the different types of inventories maintained throughout a value chain.

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

Work Measurement, Learning Curves, and Standards

Filters

Exam 12: Managing Inventories

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

Explain the difference between independent demand and dependent demand.

Marketing an operations generally prefer high inventory levels while finance would prefer small inventories.

Inventory holding costs can be accurately measured by accounting departments.

Discuss two types of stockouts.

Independent demand

Explain the different types of inventories maintained throughout a value chain.

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

Work Measurement, Learning Curves, and Standards

Filters