Question 1

In the context of inventory costs,_____ costs can reflect lost sales for external customers or costs associated with interruptions to assembly lines for internal customers.

Accepted Answer

A)   holding
B)   stockout
C)   ordering
D)   setup B

Question 2

A single-period inventory problem can be solved using a technique called _____ analysis.

Accepted Answer

A)   marginal economic
B)   total cost
C)   critical value
D)   reorder point A

Question 3

_____ inventory is an additional amount of inventory that is kept over and above the average amount required to meet demand.

Accepted Answer

A)   Seasonal
B)   Work-in-process
C)   Finished-goods
D)   Safety stock D

Question 4

In the context of managing inventories in supply chains,_____ is the time between placement of an order and its receipt.

Accepted Answer

A)   the lead time
B)   a time series
C)   the changeover time
D)   a time horizon

Question 5

Which of the following statements is true of backorders?

Accepted Answer

A)   They occur as a result of excessive stock.
B)   They occur when a customer is unwilling to wait for an ordered item.
C)   They result in additional costs.
D)   They force a customer to purchase elsewhere.

Question 6

Single-period inventory models are used in situations involving items that can be carried in inventory and sold in future periods.

Accepted Answer

A) True 
 B)False

Question 7

In a fixed-order-quantity system,when demand is uncertain,using economic order quantity (EOQ)based only on the average demand will result in a low probability of a stockout.

Accepted Answer

A) True 
 B)False

Question 8

The demand for trains between Marshdell and Deepbarrow varies throughout the year.The demand reaches its peak in summer and drops during winter.This demand for trains can be categorized as _____ demand.

Accepted Answer

A)   static
B)   overfull
C)   unwholesome
D)   dynamic

Question 9

In the context of a fixed-order-quantity system,stockouts occur whenever the lead-time demand _____.

Accepted Answer

A)   exceeds the reorder point
B)   exceeds the work-in-process inventory
C)   becomes equal to the finished-goods inventory
D)   becomes equal to the break-even point

Question 10

Vision Toys uses a fixed-quantity system to manage its inventories.The inventory includes plastic and LED bulbs.It was observed that the company often faces stockout of plastic.The average weekly demand for plastic is 100 pounds,and historical data show that the standard deviation of weekly demand is about 7.The lead time from the plastic supplier is 2 weeks.If the company's acceptable service level is 95 percent and the number of standard deviations necessary to achieve the acceptable service level is 1.645,the reorder point for plastic with safety stock is:

Accepted Answer

A)   less than or equal to 125 pounds.
B)   more than 125 pounds but less than or equal to 175 pounds.
C)   more than 175 pounds but less than or equal to 225 pounds.
D)   more than 225 pounds.

Question 11

Stable demand is usually called _____ demand.

Accepted Answer

A)   static
B)   overfull
C)   unwholesome
D)   dynamic

Question 12

In the Pareto Principle,a vital few control a high percentage of the wealth.

Accepted Answer

A) True 
 B)False

Question 13

Marketing and operations prefer high inventory levels,whereas finance would prefer small inventories.

Accepted Answer

A) True 
 B)False

Question 14

In the context of using technology to manage inventories,radio-frequency identification (RFID)chips offer an accuracy of less than 70 percent.

Accepted Answer

A) True 
 B)False

Question 15

CraftWare Inc.,a furniture manufacturer,uses ABC analysis to define its inventory value.The inventory contains wood,cast iron,adhesive,and carbon fiber.If wood accounts for 50 percent of the items and 5 percent of the total dollar value; carbon fiber accounts for 10 percent of the items and 60 percent of the total dollar value; cast iron accounts for 25 percent of the items and 18 percent of the total dollar value; and adhesive accounts for 15 percent of the items and 17 percent of the total dollar value,_____ can be classified as a class C item.

Accepted Answer

A)   wood
B)   carbon fiber
C)   cast iron
D)   adhesive

Question 16

In the context of inventory management,a(n)_____ is a single item or asset stored at a particular location.

Accepted Answer

A)   stock-keeping unit
B)   make-to-stock product
C)   average lead stock
D)   buffer stock

Question 17

The single-period inventory model applies to inventory situations where demand is uncertain.

Accepted Answer

A) True 
 B)False

Question 18

In the context of inventory costs,_____ costs are incurred as a result of the work involved in configuring tools,equipment,and machines within a factory to produce an item.

Accepted Answer

A)   setup
B)   holding
C)   stockout
D)   unit

Question 19

The demand for bread in Ahoma City ranges from 100 to 120 tons per day,every day of the year.The demand is easily satisfied on a daily basis.This demand for bread can be categorized as _____ demand.

Accepted Answer

A)   static
B)   overfull
C)   unwholesome
D)   dynamic

Question 20

Radio-frequency identification (RFID)chips allow firms to track individual containers.

Accepted Answer

A) True 
 B)False

Exam 12: Managing Inventories in Supply Chains

In the context of inventory costs,_____ costs can reflect lost sales for external customers or costs associated with interruptions to assembly lines for internal customers.

A single-period inventory problem can be solved using a technique called _____ analysis.

_____ inventory is an additional amount of inventory that is kept over and above the average amount required to meet demand.

In the context of managing inventories in supply chains,_____ is the time between placement of an order and its receipt.

Which of the following statements is true of backorders?

Single-period inventory models are used in situations involving items that can be carried in inventory and sold in future periods.

In a fixed-order-quantity system,when demand is uncertain,using economic order quantity (EOQ)based only on the average demand will result in a low probability of a stockout.

The demand for trains between Marshdell and Deepbarrow varies throughout the year.The demand reaches its peak in summer and drops during winter.This demand for trains can be categorized as _____ demand.

In the context of a fixed-order-quantity system,stockouts occur whenever the lead-time demand _____.

Stable demand is usually called _____ demand.

In the Pareto Principle,a vital few control a high percentage of the wealth.

Marketing and operations prefer high inventory levels,whereas finance would prefer small inventories.

In the context of using technology to manage inventories,radio-frequency identification (RFID)chips offer an accuracy of less than 70 percent.

In the context of inventory management,a(n) _____ is a single item or asset stored at a particular location.

The single-period inventory model applies to inventory situations where demand is uncertain.

In the context of inventory costs,_____ costs are incurred as a result of the work involved in configuring tools,equipment,and machines within a factory to produce an item.

The demand for bread in Ahoma City ranges from 100 to 120 tons per day,every day of the year.The demand is easily satisfied on a daily basis.This demand for bread can be categorized as _____ demand.

Radio-frequency identification (RFID)chips allow firms to track individual containers.