Question 1

Explain why in any given season,the one-period decision model may result in a poor choice for a stocking level?

Accepted Answer

The one-period inventory models are appropriate when decision makers handle seasonal goods that must be sold at a reduced price after the selling season.The model is based on expected values,i.e. ,the probability of experiencing demand at a certain level,perhaps based on historical data.If the data are highly variable,then there is a chance that demand may be unusually high or low,particularly in a "fashion" setting.A design that catches the public's fancy may experience high demand that exceeds the stocking level and the retailer will stock out and fail to realize all the sales that might have been possible.Conversely,a dog of a design may leave the retailer with excess inventory on the shelves.If this stocking game is played season after season,profit will be maximized,but any one season may have a different outcome.

Question 2

Scenario C.3
Consider an item with the following discrete demand distribution for a one-period inventory decision.
   This item experiences a seasonal demand pattern.A profit of $15 per unit is made if the item is sold in season,but a loss of $10 per unit is incurred if sold after the season is over.
-Use the information in Scenario C.3.What is the payoff when 40 units are ordered but a demand of 50 materializes?

Accepted Answer

A) $150 
B) $300 
C) $450 
D) $600 
A) $150 
B) $300 
C) $450 
D) $600 D

Question 3

As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 679 units.Ordering costs are $7 each time an order is placed,and the holding cost is 10% of the unit cost.Your supplier provided the following price schedule.
   What ordering-quantity policy do you recommend?

Accepted Answer

Start at lowest cost   Therefore,the best order size is 351,with a cost of $3,182.84.

Question 4

In a noninstantaneous replenishment model,as the daily demand approaches the daily production rate,the:

Accepted Answer

A) number of production runs per year decreases. 
B) length in days of a production run increases. 
C) economic lot size increases. 
D) time between production runs decreases. 
A) number of production runs per year decreases. 
B) length in days of a production run increases. 
C) economic lot size increases. 
D) time between production runs decreases.

Question 5

A manufacturer produces aluminum cans internally rather than purchasing them and uses the economic production lot size equation to govern this process.The length of time that the aluminum can batch runs is ________ and the time between the start of one batch of cans to the next is ________.

Accepted Answer

The answer of A manufacturer produces aluminum cans internally rather...

Question 6

Which one of the following statements about quantity discounts is best?

Accepted Answer

A) The minimum cost point on each price curve is always feasible. 
B) A price break is the maximum quantity needed to get a discount. 
C) If the EOQ for the lowest price is feasible,this is the best lot size. 
D) Either price or quantity is sufficient for the search for the best lot size. 
A) The minimum cost point on each price curve is always feasible. 
B) A price break is the maximum quantity needed to get a discount. 
C) If the EOQ for the lowest price is feasible,this is the best lot size. 
D) Either price or quantity is sufficient for the search for the best lot size.

Question 7

Sketch the economic production lot size (ELS)graph of inventory level as a function of time and label all elements of the graph.

Accepted Answer

The answer of Sketch the economic production lot size (ELS)graph...

Question 8

When facing quantity discounts,the EOQ found with the lowest price level is always the lowest total cost plan.

Accepted Answer

A) True 
 B)False

Question 9

The pile of inventory accumulated in an economic production lot size situation is ________ than the lot size dictated by the ELS calculation.

Accepted Answer

The answer of The pile of inventory accumulated in an...

Question 10

The closer the in-season and after season sales price are,the lower the order placed at the start of the season.

Accepted Answer

A) True 
 B)False

Question 11

The ________ is the optimal lot size in situations in which replenishment is not instantaneous.

Accepted Answer

economic p

Question 12

A production manager uses the economic lot size approach to determine the batch size for a product with an annual demand of 20,000 units per year.The setup cost for each batch is $50 and once the setup is complete,the product may be produced at the rate of 800 units per day.There is a holding cost of $2 per unit per year and the plant operates on a 250-day production year.If the machine used to produce this product is needed for another item and it takes one day to set up regardless of product,how many production days are available for production of the new item?

Accepted Answer

ELS = @#IMG-DLM& @#IMG-DLM& = @#IMG-DLM& @#IMG-DLM& = 1,054 units
Production tim

Question 13

Consider a manufacturer that uses the economic production lot size (ELS)model.What must the relationship be between production rate and demand rate for the producer to realize a maximum inventory that is exactly half of their lot size?

Accepted Answer

A) p = d 
B) p = 0.5d 
C) p = 2d 
D) p = 1.5d 
A) p = d 
B) p = 0.5d 
C) p = 2d 
D) p = 1.5d

Question 14

A production manager is making a decision on batch size for a product with an annual demand of 25,000 units per year.The setup cost for each batch is $45 and once the setup is complete,the product may be produced at the rate of 650 units per day.There is a holding cost of $2 per unit per year and the plant operates on a 250-day production year.How big should the production batch be and how long (in days)will it take to produce the batch?

Accepted Answer

ELS = @#IMG-DLM& @#IMG-DLM& = @#IMG-DLM& @#IMG-DLM& = 1,153

Question 15

In a one-period inventory model,the after-season sales price may be zero.

Accepted Answer

A) True 
 B)False

Question 16

In an economic production lot size situation,the producer is producing half the time if the ratio of production rate to demand rate is ________.

Accepted Answer

The answer of In an economic production lot size situation,the...

Question 17

Scenario C.2
Kyle store sells K2 skis.The store makes a $200 profit per unit sold during the ski season,but it will take a $50 loss per unit if sold after the season is over.The following discrete probability distribution has been estimated for the season's demand.
  
-Use the information in Scenario C.2.What is the payoff with an order quantity (Q)of 40 units if the demand (D)is 30 units?

Accepted Answer

A) less than or equal to $2,000 
B) greater than $2,000 but less than or equal to $4,000 
C) greater than $4,000 but less than or equal to $6,000 
D) greater than $6,000 
A) less than or equal to $2,000 
B) greater than $2,000 but less than or equal to $4,000 
C) greater than $4,000 but less than or equal to $6,000 
D) greater than $6,000

Question 18

Consider a manufacturer that uses the economic production lot size (ELS)model.What must the relationship be between production rate and demand rate for the producer to spend double the time in the production and demand portion of the inventory cycle as they spend in the demand only portion of the inventory cycle?

Accepted Answer

A) p = 1.5d 
B) p = d 
C) 2p = d 
D) p = 2d 
A) p = 1.5d 
B) p = d 
C) 2p = d 
D) p = 2d

Question 19

In a one-period inventory model,the more profitable the item during the sales season,the higher the order placed at the start of the season.

Accepted Answer

A) True 
 B)False

Question 20

Scenario C.3
Consider an item with the following discrete demand distribution for a one-period inventory decision.
   This item experiences a seasonal demand pattern.A profit of $15 per unit is made if the item is sold in season,but a loss of $10 per unit is incurred if sold after the season is over.
-Use the information in Scenario C.3.What is the payoff when 40 units are ordered but a demand of 30 materializes?

Accepted Answer

A) $0 
B) $100 
C) $350 
D) $450 
A) $0 
B) $100 
C) $350 
D) $450

Explain why in any given season,the one-period decision model may result in a poor choice for a stocking level?

In a noninstantaneous replenishment model,as the daily demand approaches the daily production rate,the:

A manufacturer produces aluminum cans internally rather than purchasing them and uses the economic production lot size equation to govern this process.The length of time that the aluminum can batch runs is and the time between the start of one batch of cans to the next is .

Which one of the following statements about quantity discounts is best?

Sketch the economic production lot size (ELS)graph of inventory level as a function of time and label all elements of the graph.

When facing quantity discounts,the EOQ found with the lowest price level is always the lowest total cost plan.

The pile of inventory accumulated in an economic production lot size situation is ________ than the lot size dictated by the ELS calculation.

The closer the in-season and after season sales price are,the lower the order placed at the start of the season.

The ________ is the optimal lot size in situations in which replenishment is not instantaneous.

Consider a manufacturer that uses the economic production lot size (ELS)model.What must the relationship be between production rate and demand rate for the producer to realize a maximum inventory that is exactly half of their lot size?

In a one-period inventory model,the after-season sales price may be zero.

In an economic production lot size situation,the producer is producing half the time if the ratio of production rate to demand rate is ________.

In a one-period inventory model,the more profitable the item during the sales season,the higher the order placed at the start of the season.

Using Operations to Compete

Project Management

Process Strategy

Process Analysis

Quality and Performance

Capacity Planning

Constraint Management

Lean Systems

Supply Chain Inventory Management

Supply Chain Design

Supply Chain Location Decisions

Supply Chain Integration

Supply Chain Sustainability and Humanitarian Logistics

Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Waiting Line

Linear Programming

Simulation

Financial Analysis

Acceptance Sampling Plans

Measuring Output Rates

Learning Curve Analysis

Operations Scheduling

Filters

Exam 19: Special Inventory Models

Explain why in any given season,the one-period decision model may result in a poor choice for a stocking level?

In a noninstantaneous replenishment model,as the daily demand approaches the daily production rate,the:

A manufacturer produces aluminum cans internally rather than purchasing them and uses the economic production lot size equation to govern this process.The length of time that the aluminum can batch runs is ________ and the time between the start of one batch of cans to the next is ________.

Which one of the following statements about quantity discounts is best?

Sketch the economic production lot size (ELS)graph of inventory level as a function of time and label all elements of the graph.

When facing quantity discounts,the EOQ found with the lowest price level is always the lowest total cost plan.

The pile of inventory accumulated in an economic production lot size situation is ________ than the lot size dictated by the ELS calculation.

The closer the in-season and after season sales price are,the lower the order placed at the start of the season.

The ________ is the optimal lot size in situations in which replenishment is not instantaneous.

Consider a manufacturer that uses the economic production lot size (ELS)model.What must the relationship be between production rate and demand rate for the producer to realize a maximum inventory that is exactly half of their lot size?

In a one-period inventory model,the after-season sales price may be zero.

In an economic production lot size situation,the producer is producing half the time if the ratio of production rate to demand rate is ________.

In a one-period inventory model,the more profitable the item during the sales season,the higher the order placed at the start of the season.

Using Operations to Compete

Project Management

Process Strategy

Process Analysis

Quality and Performance

Capacity Planning

Constraint Management

Lean Systems

Supply Chain Inventory Management

Supply Chain Design

Supply Chain Location Decisions

Supply Chain Integration

Supply Chain Sustainability and Humanitarian Logistics

Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Waiting Line

Linear Programming

Simulation

Financial Analysis

Acceptance Sampling Plans

Measuring Output Rates

Learning Curve Analysis

Operations Scheduling

Filters

A manufacturer produces aluminum cans internally rather than purchasing them and uses the economic production lot size equation to govern this process.The length of time that the aluminum can batch runs is and the time between the start of one batch of cans to the next is .