Question 1

If the optimal production lot size decreases,average inventory increases.

Accepted Answer

A) True 
 B)False

Question 2

Inventory position is the amount of inventory on hand plus the amount

Accepted Answer

A) on order. 
B) promised to customers. 
C) on reserve. 
D) to be returned to suppliers. 
A) on order. 
B) promised to customers. 
C) on reserve. 
D) to be returned to suppliers.

Question 3

A lawn and garden shop that is open for business seven days a week orders bags of grass seed every other Monday.Lead time for seed orders is five days.On Monday,at ordering time,a clerk found 112 bags of seed in stock so he ordered 198 bags.Daily demand for grass seed is normally distributed with a mean of 15 bags and a standard deviation of four bags.​
The manager would like to know the probability that a grass seed stockout will occur before the next order arrives.

Accepted Answer

z = 1.43,s

Question 4

When there is probabilistic demand in a multiperiod model,the inventory level will not decrease smoothly and can fall below 0.

Accepted Answer

A) True 
 B)False

Question 5

Inventory

Accepted Answer

A) is held against uncertain usage so that a supply of items is available if needed. 
B) constitutes a small part of the cost of doing business. 
C) is not something that can be managed effectively. 
D) All of these are correct. 
A) is held against uncertain usage so that a supply of items is available if needed. 
B) constitutes a small part of the cost of doing business. 
C) is not something that can be managed effectively. 
D) All of these are correct.

Question 6

For the EOQ model,which of the following relationships is NOT correct?

Accepted Answer

A) As the order quantity increases,the number of orders placed annually decreases. 
B) As the order quantity increases,annual holding cost increases. 
C) As the order quantity increases,annual ordering cost increases. 
D) As the order quantity increases,average inventory increases. 
A) As the order quantity increases,the number of orders placed annually decreases. 
B) As the order quantity increases,annual holding cost increases. 
C) As the order quantity increases,annual ordering cost increases. 
D) As the order quantity increases,average inventory increases.

Question 7

The EOQ model is insensitive to small variations or errors in the cost estimates.

Accepted Answer

A) True 
 B)False

Question 8

In the periodic review model,the order quantity at each review period must be sufficient to cover demand for the review period plus the demand for the following lead time.

Accepted Answer

A) True 
 B)False

Question 9

For the periodic review inventory model presented in the textbook,it is assumed that a special replenishment order will be placed in the event of a stockout between review points.

Accepted Answer

A) True 
 B)False

Question 10

Amazing Bakers sells bread to 40 supermarkets.It costs Amazing $1250 per day to operate its plant.The profit per loaf of bread sold in the supermarket is $0.025.Any unsold bread is returned to Amazing to be sold at a loss of $0.015.
a.If sales follow a normal distribution with μ = 70,000 and σ = 5000 per day,how many loaves should Amazing bake daily?
b.Amazing is considering a different sales plan for which the profit per loaf of bread sold in the supermarket is $0.03 and the loss per loaf of bread returned is $0.018.If μ = 60,000 and σ = 4000 per day,how many loaves should Amazing bake daily?

Accepted Answer

The answer of Amazing Bakers sells bread to 40 supermarkets.It...

Question 11

Periodic review inventory systems

Accepted Answer

A) are less subject to stockouts than corresponding continuous review systems. 
B) require larger safety stock levels than corresponding continuous review systems. 
C) have constant order quantities. 
D) make the coordination of orders for multiple products more difficult. 
A) are less subject to stockouts than corresponding continuous review systems. 
B) require larger safety stock levels than corresponding continuous review systems. 
C) have constant order quantities. 
D) make the coordination of orders for multiple products more difficult.

Question 12

An office supply store open five days a week must determine the best inventory policy for boxes of copier paper.Weekly demand is nearly constant at 250 boxes.When orders are placed,the entire shipment arrives at once.The cost per box is $22,and the inventory holding cost is 30%.Orders are placed at a cost of $40 each,including preparation time and communication charges,and the lead time is two days.
a.Find the optimal order quantity.
b.What is the reorder point?
c.How often should an order be placed?
d.What is the cycle time?

Accepted Answer

The answer of An office supply store open five days...

Question 13

Daily demand for packages of five videotapes at a warehouse store is found to be normally distributed with mean 50 and standard deviation 5.When the store orders more tapes,the ordering cost is $42 and the orders take four days to arrive.Each pack of tapes costs $7.20,and there is a 24% annual holding cost for inventory.Assume the store is open 360 days a year.
a.What is the EOQ?
b.If the store wants the probability of stocking out to be no more than 5%,and demand each day is independent of the day before,what reorder point should be set?
c.How much of your reorder point in part b)is safety stock?

Accepted Answer

The answer of Daily demand for packages of five videotapes...

Question 14

It is logical to order an amount from the highest discount category when quantity discounts are available.

Accepted Answer

A) True 
 B)False

Question 15

The economic production lot size model is appropriate when

Accepted Answer

A) demand exceeds the production rate. 
B) there is a constant supply rate for every period,without pause. 
C) ordering cost is equivalent to the production setup cost. 
D) All of these are correct. 
A) demand exceeds the production rate. 
B) there is a constant supply rate for every period,without pause. 
C) ordering cost is equivalent to the production setup cost. 
D) All of these are correct.

Question 16

If S indicates the number of backorders that have accumulated by the time a new shipment of size Q is received,and we ship existing backorders to our customers and place the remaining units in inventory,then __________ is the maximum inventory we subsequently have on hand.

Accepted Answer

A) Q 
B) Q − S 
C) S 
D) (Q − S)/2 
A) Q 
B) Q − S 
C) S 
D) (Q − S)/2

Question 17

When demand is independent,it is not related to demand for other components or items produced by the firm.

Accepted Answer

A) True 
 B)False

Question 18

In the EOQ model,if the average inventory during each cycle is 1/2Q,the average inventory over any number of cycles is Q/2.

Accepted Answer

A) True 
 B)False

Question 19

A weekly sports magazine publishes a special edition for the World Series.The sales forecast is for the number of copies to be normally distributed with mean 800,000 copies and standard deviation 60,000 copies.It costs $0.35 to print a copy,and the newsstand price is $1.95.Unsold copies will be scrapped.How many copies should be printed?

Accepted Answer

P(demand < Q*)= 1.6/

Question 20

The cost of overestimating demand is usually harder to determine than the cost of underestimating demand.

Accepted Answer

A) True 
 B)False

If the optimal production lot size decreases,average inventory increases.

Inventory position is the amount of inventory on hand plus the amount

When there is probabilistic demand in a multiperiod model,the inventory level will not decrease smoothly and can fall below 0.

Inventory

For the EOQ model,which of the following relationships is NOT correct?

The EOQ model is insensitive to small variations or errors in the cost estimates.

In the periodic review model,the order quantity at each review period must be sufficient to cover demand for the review period plus the demand for the following lead time.

For the periodic review inventory model presented in the textbook,it is assumed that a special replenishment order will be placed in the event of a stockout between review points.

Periodic review inventory systems

It is logical to order an amount from the highest discount category when quantity discounts are available.

The economic production lot size model is appropriate when

If S indicates the number of backorders that have accumulated by the time a new shipment of size Q is received,and we ship existing backorders to our customers and place the remaining units in inventory,then __________ is the maximum inventory we subsequently have on hand.

When demand is independent,it is not related to demand for other components or items produced by the firm.

In the EOQ model,if the average inventory during each cycle is 1/2Q,the average inventory over any number of cycles is Q/2.

The cost of overestimating demand is usually harder to determine than the cost of underestimating demand.

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, finance, and OM

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Nonlinear Optimization Models

Project Scheduling: Pertcpm

Waiting Line Models

Simulation

Decision Analysis

Multicriteria Decisions

Time Series Analysis and Forecasting

Markov Processes

Linear Programming: Simplex Method

Simplex-Based Sensitivity Analysis and Duality

Solution Procedures for Transportation and Assignment Problems

Minimal Spanning Tree

Dynamic Programming

Filters

Exam 10: Inventory Models

If the optimal production lot size decreases,average inventory increases.

Inventory position is the amount of inventory on hand plus the amount

When there is probabilistic demand in a multiperiod model,the inventory level will not decrease smoothly and can fall below 0.

Inventory

For the EOQ model,which of the following relationships is NOT correct?

The EOQ model is insensitive to small variations or errors in the cost estimates.

In the periodic review model,the order quantity at each review period must be sufficient to cover demand for the review period plus the demand for the following lead time.

For the periodic review inventory model presented in the textbook,it is assumed that a special replenishment order will be placed in the event of a stockout between review points.

Periodic review inventory systems

It is logical to order an amount from the highest discount category when quantity discounts are available.

The economic production lot size model is appropriate when

If S indicates the number of backorders that have accumulated by the time a new shipment of size Q is received,and we ship existing backorders to our customers and place the remaining units in inventory,then __________ is the maximum inventory we subsequently have on hand.

When demand is independent,it is not related to demand for other components or items produced by the firm.

In the EOQ model,if the average inventory during each cycle is 1/2Q,the average inventory over any number of cycles is Q/2.

The cost of overestimating demand is usually harder to determine than the cost of underestimating demand.

Introduction

An Introduction to Linear Programming

Linear Programming: Sensitivity Analysis and Interpretation of Solution

Linear Programming Applications in Marketing, finance, and OM

Advanced Linear Programming Applications

Distribution and Network Models

Integer Linear Programming

Nonlinear Optimization Models

Project Scheduling: Pertcpm

Waiting Line Models

Simulation

Decision Analysis

Multicriteria Decisions

Time Series Analysis and Forecasting

Markov Processes

Linear Programming: Simplex Method

Simplex-Based Sensitivity Analysis and Duality

Solution Procedures for Transportation and Assignment Problems

Minimal Spanning Tree

Dynamic Programming

Filters