Question 1

The shadow price

Accepted Answer

A)  indicates the amount by which throughput will increase for one unit of unconstrained resource. 
B)  is the price paid on the black market for one unit of scarce resource. 
C)  is the price paid at night for a scarce resource. 
D)  indicates the amount by which contribution margin will increase for one unit of scarce resource. 
A)  indicates the amount by which throughput will increase for one unit of unconstrained resource. 
B)  is the price paid on the black market for one unit of scarce resource. 
C)  is the price paid at night for a scarce resource. 
D)  indicates the amount by which contribution margin will increase for one unit of scarce resource.

Question 2

Which of the following elements could be determined by using the economic order quantity formula?

Accepted Answer

A)  the optimum size of production run 
B)  reorder point 
C)  safety stock 
D)  annual demand 
A)  the optimum size of production run 
B)  reorder point 
C)  safety stock 
D)  annual demand

Question 3

A withdrawal Kanban specifies

Accepted Answer

A)  how much should be produced to replace inventory. 
B)  the quantity that a subsequent process should withdraw from the preceding process. 
C)  when customers should be notified to pick up orders. 
D)  when suppliers should be notified to deliver more parts. 
A)  how much should be produced to replace inventory. 
B)  the quantity that a subsequent process should withdraw from the preceding process. 
C)  when customers should be notified to pick up orders. 
D)  when suppliers should be notified to deliver more parts.

Question 4

When a product mix does not utilize fully its constraints, they are called loose constraints, when used completely, they are called binding constraints.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT an example of an ordering cost?

Accepted Answer

A)  receiving costs 
B)  salespeople's salaries costs 
C)  clerical costs of preparing documents 
D)  insurance costs on shipment 
A)  receiving costs 
B)  salespeople's salaries costs 
C)  clerical costs of preparing documents 
D)  insurance costs on shipment

Question 6

The traditional inventory model based on anticipated demand is called the __________ inventory management.
or

Accepted Answer

just-in-ca

Question 7

Figure 20-4 Montgomery Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production.
Time requirements to produce one unit of A and B are as follows:
  Refer to Figure 20-4. What is the constraint on labor hours for Montgomery Company?

Accepted Answer

A)  6A + 3B £ 500 
B)  6A + 2B £ 500 
C)  2A + 5B £ 300 
D)  40A + 30B £ 500 
A)  6A + 3B £ 500 
B)  6A + 2B £ 500 
C)  2A + 5B £ 300 
D)  40A + 30B £ 500

Question 8

The theory of constraints focuses on two operational measures of system performance: inventory expenses and operating expenses.

Accepted Answer

A) True 
 B)False

Question 9

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
  What is the equation for the constraint on materials?

Accepted Answer

A)  5X + 6Y £ 300 
B)  4X + 3Y £ 100 
C)  5X + 6Y £ 100 
D)  2X + 3Y £ 100 
A)  5X + 6Y £ 300 
B)  4X + 3Y £ 100 
C)  5X + 6Y £ 100 
D)  2X + 3Y £ 100

Question 10

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
  What is the equation for the constraint on direct labor?

Accepted Answer

A)  2X + 3Y £ 300 
B)  5X + 3Y £ 300 
C)  5X + 6Y £ 100 
D)  5X + 3Y £ 100 
A)  2X + 3Y £ 300 
B)  5X + 3Y £ 300 
C)  5X + 6Y £ 100 
D)  5X + 3Y £ 100

Question 11

The __________ is the amount of inventory needed to keep the constrained resource busy for a specified time interval.

Accepted Answer

The answer of The __________ is the amount of inventory...

Question 12

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
  What is the objective function for maximizing profits?

Accepted Answer

A)  Minimize $5X + $6Y 
B)  Maximize $2X + $3Y 
C)  Maximize $5X + $6Y 
D)  Maximize $5X + $3Y 
A)  Minimize $5X + $6Y 
B)  Maximize $2X + $3Y 
C)  Maximize $5X + $6Y 
D)  Maximize $5X + $3Y

Question 13

A linear programming problem has the following objective function: 20X + 40Y + 60Z. If the optimal solution provided by the model is to produce and sell 100, 200, and 300 units of X, Y, and Z, respectively, what is the expected return?

Accepted Answer

A)  $36,000 
B)  $28,000 
C)  $120 
D)  $24,000 
A)  $36,000 
B)  $28,000 
C)  $120 
D)  $24,000

Question 14

Which of the following is NOT considered a carrying cost?

Accepted Answer

A)  insurance on the inventory 
B)  the opportunity cost of funds invested in inventory 
C)  storage costs 
D)  receiving costs 
A)  insurance on the inventory 
B)  the opportunity cost of funds invested in inventory 
C)  storage costs 
D)  receiving costs

Question 15

Strategic objectives of JIT include

Accepted Answer

A)  increasing profits. 
B)  improving a firm's competitive position. 
C)  increasing inventory. 
D)  both a and b. 
A)  increasing profits. 
B)  improving a firm's competitive position. 
C)  increasing inventory. 
D)  both a and b.

Question 16

If the objective is to maximize profits in a linear programming problem, the coefficients of the variables in the objective function should be the

Accepted Answer

A)  selling price per unit. 
B)  variable costs per unit. 
C)  contribution margin per unit. 
D)  fixed costs per unit. 
A)  selling price per unit. 
B)  variable costs per unit. 
C)  contribution margin per unit. 
D)  fixed costs per unit.

Question 17

With multiple internal binding constraints, the optimal mix is determined by a graphical approach or the simplex method.

Accepted Answer

A) True 
 B)False

Question 18

the manufacturing model which shares the same practices as a JIT manufacturing system is called __________ manufacturing.

Accepted Answer

The answer of the manufacturing model which shares the same...

Question 19

External constraints are imposed on a firm from within and internal constraints are imposed electronically.

Accepted Answer

A) True 
 B)False

Question 20

If inventory consists of goods purchased from an outside supplier, the inventory-related costs are

Accepted Answer

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

The shadow price

Which of the following elements could be determined by using the economic order quantity formula?

A withdrawal Kanban specifies

When a product mix does not utilize fully its constraints, they are called loose constraints, when used completely, they are called binding constraints.

Which of the following is NOT an example of an ordering cost?

The traditional inventory model based on anticipated demand is called the __________ inventory management. or

The theory of constraints focuses on two operational measures of system performance: inventory expenses and operating expenses.

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the equation for the constraint on materials?

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the equation for the constraint on direct labor?

The __________ is the amount of inventory needed to keep the constrained resource busy for a specified time interval.

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the objective function for maximizing profits?

A linear programming problem has the following objective function: 20X + 40Y + 60Z. If the optimal solution provided by the model is to produce and sell 100, 200, and 300 units of X, Y, and Z, respectively, what is the expected return?

Which of the following is NOT considered a carrying cost?

Strategic objectives of JIT include

If the objective is to maximize profits in a linear programming problem, the coefficients of the variables in the objective function should be the

With multiple internal binding constraints, the optimal mix is determined by a graphical approach or the simplex method.

the manufacturing model which shares the same practices as a JIT manufacturing system is called __________ manufacturing.

External constraints are imposed on a firm from within and internal constraints are imposed electronically.

If inventory consists of goods purchased from an outside supplier, the inventory-related costs are

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 shadow price

Which of the following elements could be determined by using the economic order quantity formula?

A withdrawal Kanban specifies

When a product mix does not utilize fully its constraints, they are called loose constraints, when used completely, they are called binding constraints.

Which of the following is NOT an example of an ordering cost?

The traditional inventory model based on anticipated demand is called the __________ inventory management. or

The theory of constraints focuses on two operational measures of system performance: inventory expenses and operating expenses.

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the equation for the constraint on materials?

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the equation for the constraint on direct labor?

The __________ is the amount of inventory needed to keep the constrained resource busy for a specified time interval.

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows: What is the objective function for maximizing profits?

A linear programming problem has the following objective function: 20X + 40Y + 60Z. If the optimal solution provided by the model is to produce and sell 100, 200, and 300 units of X, Y, and Z, respectively, what is the expected return?

Which of the following is NOT considered a carrying cost?

Strategic objectives of JIT include

If the objective is to maximize profits in a linear programming problem, the coefficients of the variables in the objective function should be the

With multiple internal binding constraints, the optimal mix is determined by a graphical approach or the simplex method.

the manufacturing model which shares the same practices as a JIT manufacturing system is called __________ manufacturing.

External constraints are imposed on a firm from within and internal constraints are imposed electronically.

If inventory consists of goods purchased from an outside supplier, the inventory-related costs are

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