Question 1

The theory of constraints focuses on each of the following measures of organizational performance EXCEPT

Accepted Answer

A)  revenues. 
B)  throughput. 
C)  operating expenses. 
D)  inventory. 
A)  revenues. 
B)  throughput. 
C)  operating expenses. 
D)  inventory.

Question 2

Alabaster Manufacturing Company increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

Accepted Answer

A)  no change 
B)  increase 
C)  decrease 
D)  cannot be determined 
A)  no change 
B)  increase 
C)  decrease 
D)  cannot be determined

Question 3

A linear programming model would NOT include which of the following items?

Accepted Answer

A)  independent variables 
B)  networks 
C)  dependent variables 
D)  objective function 
A)  independent variables 
B)  networks 
C)  dependent variables 
D)  objective function

Question 4

The correct order for the four steps that must be followed to solve problems graphically is

Accepted Answer

A)  Graph each constraint, Identify the feasible set of solutions, Identify all the corner-point values in the feasible set, Select the corner point that yields the largest value for the objective function. 
B)  Identify the feasible set of solutions, Graph each constraint, Identify all the corner-point values in the feasible set, Select the corner point that yields the largest value for the objective function. 
C)  Identify the feasible set of solutions, Identify all the corner-point values in the feasible set, Graph each constraint, Select the corner point that yields the largest value for the objective function. 
D)  Graph each constraint, Identify all the corner-point values in the feasible set, Identify the feasible set of solutions, Select the corner point that yields the largest value for the objective function. 
A)  Graph each constraint, Identify the feasible set of solutions, Identify all the corner-point values in the feasible set, Select the corner point that yields the largest value for the objective function. 
B)  Identify the feasible set of solutions, Graph each constraint, Identify all the corner-point values in the feasible set, Select the corner point that yields the largest value for the objective function. 
C)  Identify the feasible set of solutions, Identify all the corner-point values in the feasible set, Graph each constraint, Select the corner point that yields the largest value for the objective function. 
D)  Graph each constraint, Identify all the corner-point values in the feasible set, Identify the feasible set of solutions, Select the corner point that yields the largest value for the objective function.

Question 5

In the economic order quantity equation, the numerator under the square root includes

Accepted Answer

A)  annual demand and cost of placing an order. 
B)  annual demand and unit carrying cost. 
C)  unit carrying cost and cost of placing an order. 
D)  order quantity and cost of placing an order. 
A)  annual demand and cost of placing an order. 
B)  annual demand and unit carrying cost. 
C)  unit carrying cost and cost of placing an order. 
D)  order quantity and cost of placing an order.

Question 6

The following information is available for Woodside Furniture Company, which sells two products:   There are 200 hours available in the plant and 200 square feet of metal available per operating period.
The constraint equation representing processing time available is

Accepted Answer

A)  4X + 6Y £ 200. 
B)  4X + 6Y ³ 200. 
C)  30X + 18Y £ 200. 
D)  4X + 6Y £ 400. 
A)  4X + 6Y £ 200. 
B)  4X + 6Y ³ 200. 
C)  30X + 18Y £ 200. 
D)  4X + 6Y £ 400.

Question 7

Which of the following is TRUE about the theory of constraints?

Accepted Answer

A)  TOC recognizes that EOQ is important. 
B)  TOC recognizes that lowering inventory decreases carrying costs and thus decreases operating expenses and improves net income. 
C)  TOC recognizes that lower inventories mean more defects. 
D)  TOC recognizes that lower inventories mean slower response to customers. 
A)  TOC recognizes that EOQ is important. 
B)  TOC recognizes that lowering inventory decreases carrying costs and thus decreases operating expenses and improves net income. 
C)  TOC recognizes that lower inventories mean more defects. 
D)  TOC recognizes that lower inventories mean slower response to customers.

Question 8

Which of the following equations determines the total annual carrying costs when no safety stock is kept?

Accepted Answer

A)  Cost of placing an order ´ Order quantity 
B)  Cost of placing an order ´ Number of orders per year 
C)  Cost of placing an order ´ One-half of the order quantity 
D)  Unit carrying costs per year ´ One-half of the order quantity 
A)  Cost of placing an order ´ Order quantity 
B)  Cost of placing an order ´ Number of orders per year 
C)  Cost of placing an order ´ One-half of the order quantity 
D)  Unit carrying costs per year ´ One-half of the order quantity

Question 9

Which of the following costs are considered in the EOQ model?

Accepted Answer

A)  ordering costs 
B)  selling costs 
C)  carrying costs 
D)  both a and c 
A)  ordering costs 
B)  selling costs 
C)  carrying costs 
D)  both a and c

Question 10

Knoxville Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively. Only 200 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows:
  What is the constraint on machine hours for Knoxville Manufacturing Company?

Accepted Answer

A)  10X + 90Y £ 200 
B)  1X + 2Y £ 400 
C)  5X + 1Y £ 400 
D)  1X + 2Y £ 200 
A)  10X + 90Y £ 200 
B)  1X + 2Y £ 400 
C)  5X + 1Y £ 400 
D)  1X + 2Y £ 200

Question 11

With JIT manufacturing, finished goods inventories are

Accepted Answer

A)  kept high to avoid stockouts. 
B)  held in various locations for faster delivery to customers. 
C)  immaterial. 
D)  kept high to let the company take advantage of volume discounts. 
A)  kept high to avoid stockouts. 
B)  held in various locations for faster delivery to customers. 
C)  immaterial. 
D)  kept high to let the company take advantage of volume discounts.

Question 12

Dry Creek Company decreased the size of inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

Accepted Answer

A)  no change 
B)  decrease 
C)  increase 
D)  cannot be determined 
A)  no change 
B)  decrease 
C)  increase 
D)  cannot be determined

Question 13

The inventory management system which represents the continuous goal of eliminating waste is called the __________ inventory management.
or

Accepted Answer

just-in-ti

Question 14

The goal of the theory of constraints is to make money in the future by managing constraints.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is NOT an opportunity cost associated with inventory management?

Accepted Answer

A)  lost sales to customers 
B)  use of capital tied up in inventory investment 
C)  cost of expediting 
D)  all are opportunity costs 
A)  lost sales to customers 
B)  use of capital tied up in inventory investment 
C)  cost of expediting 
D)  all are opportunity costs

Question 16

Albuquerque Company has the following information available concerning one of its inventory items:   If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Accepted Answer

A)  0.83 days 
B)  8.00 days 
C)  6.67 days 
D)  40.00 days 
A)  0.83 days 
B)  8.00 days 
C)  6.67 days 
D)  40.00 days

Question 17

Albuquerque Company has the following information available concerning one of its inventory items:   The economic order quantity for this item is

Accepted Answer

A)  16 units. 
B)  160,000 units. 
C)  500 units. 
D)  400 units. 
A)  16 units. 
B)  160,000 units. 
C)  500 units. 
D)  400 units.

Question 18

Figure 20 - 1 Moriah's Candle Company manufactures candles. The company buys wax in 45-Kilogram containers that cost $17 each. The company uses 25,000 containers per year, and usage occurs evenly throughout the year. The average cost to carry a 45-Kilogram container in inventory per year is $3, and the cost to place an order is $9. The company works 250 days per year.
Refer to Figure 20-1. The lead time is 4 working days and the average rate of usage is 60 containers per day. What is the reorder point?

Accepted Answer

A)  240 containers 
B)  260 containers 
C)  220 containers 
D)  200 containers 
A)  240 containers 
B)  260 containers 
C)  220 containers 
D)  200 containers

Question 19

Theory of constraints focuses on what three operation measures of system performance?

Accepted Answer

A)  inventory, throughput, and loose constraints 
B)  throughput, operating expenses, and product mix 
C)  throughput, inventory, and operating expenses 
D)  throughput, operating expenses and contribution margin 
A)  inventory, throughput, and loose constraints 
B)  throughput, operating expenses, and product mix 
C)  throughput, inventory, and operating expenses 
D)  throughput, operating expenses and contribution margin

Question 20

In the graphic method of solving a linear programming problem, which of the following is depicted on the graph?

Accepted Answer

A)  coefficient of correlation 
B)  constraint 
C)  least-squares line of best fit 
D)  break-even point 
A)  coefficient of correlation 
B)  constraint 
C)  least-squares line of best fit 
D)  break-even point

The theory of constraints focuses on each of the following measures of organizational performance EXCEPT

Alabaster Manufacturing Company increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

A linear programming model would NOT include which of the following items?

The correct order for the four steps that must be followed to solve problems graphically is

In the economic order quantity equation, the numerator under the square root includes

The following information is available for Woodside Furniture Company, which sells two products: There are 200 hours available in the plant and 200 square feet of metal available per operating period. The constraint equation representing processing time available is

Which of the following is TRUE about the theory of constraints?

Which of the following equations determines the total annual carrying costs when no safety stock is kept?

Which of the following costs are considered in the EOQ model?

With JIT manufacturing, finished goods inventories are

Dry Creek Company decreased the size of inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

The inventory management system which represents the continuous goal of eliminating waste is called the __________ inventory management. or

The goal of the theory of constraints is to make money in the future by managing constraints.

Which of the following is NOT an opportunity cost associated with inventory management?

Albuquerque Company has the following information available concerning one of its inventory items: If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Albuquerque Company has the following information available concerning one of its inventory items: The economic order quantity for this item is

Theory of constraints focuses on what three operation measures of system performance?

In the graphic method of solving a linear programming problem, which of the following is depicted on the graph?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Filters

Exam 20: Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

The theory of constraints focuses on each of the following measures of organizational performance EXCEPT

Alabaster Manufacturing Company increased the size of several inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

A linear programming model would NOT include which of the following items?

The correct order for the four steps that must be followed to solve problems graphically is

In the economic order quantity equation, the numerator under the square root includes

The following information is available for Woodside Furniture Company, which sells two products: There are 200 hours available in the plant and 200 square feet of metal available per operating period. The constraint equation representing processing time available is

Which of the following is TRUE about the theory of constraints?

Which of the following equations determines the total annual carrying costs when no safety stock is kept?

Which of the following costs are considered in the EOQ model?

With JIT manufacturing, finished goods inventories are

Dry Creek Company decreased the size of inventory order quantities that had previously been determined using the EOQ model. What is the impact on the total amount of annual carrying and ordering costs?

The inventory management system which represents the continuous goal of eliminating waste is called the __________ inventory management. or

The goal of the theory of constraints is to make money in the future by managing constraints.

Which of the following is NOT an opportunity cost associated with inventory management?

Albuquerque Company has the following information available concerning one of its inventory items: If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

Albuquerque Company has the following information available concerning one of its inventory items: The economic order quantity for this item is

Theory of constraints focuses on what three operation measures of system performance?

In the graphic method of solving a linear programming problem, which of the following is depicted on the graph?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Product and Service Costing: Job-Order System

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Filters