Question 1

The JIT concept has three underlying elements: zero inventories; short, consistent lead times; and small, frequent replenishment quantities.

Accepted Answer

A) True 
 B)False

Question 2

WIP inventories:

Accepted Answer

A)  are not included on the balance sheet. 
B)  are associated with manufacturing. 
C)  are the same as VMI inventories. 
D)  are not impacted by EOQ.

Question 3

What are push and pull systems? Name at least one inventory management system that is a push or pull system.

Accepted Answer

The answer of What are push and pull systems? Name...

Question 4

Ordering cost refers to the expense of placing an order for additional inventory, including the cost or expense of the product itself.

Accepted Answer

A) True 
 B)False

Question 5

Compare and contrast the fixed quantity version of EOQ with the fixed interval version. In which situations would each be used?

Accepted Answer

The answer of Compare and contrast the fixed quantity version...

Question 6

A DRP system is usually coupled with a _____ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.

Accepted Answer

A)  Kanban 
B)  VMI/consignment 
C)  MRP 
D)  JIT

Question 7

Especially for wholesalers and retailers involved in the distribution channels for consumer packaged goods, inventory management is a careful balancing act between:

Accepted Answer

A)  supply and demand. 
B)  controlled supply and variable demand. 
C)  lower inventory levels and acceptable customer service levels. 
D)  variable inventory levels and consistent customer service levels.

Question 8

The reorder point depends on the orders in-house at that time.

Accepted Answer

A) True 
 B)False

Question 9

Trekker Luggage and Travel Gear needs to manufacture 10,000 suitcases for an upcoming order. Each suitcase requires 4 rivets. Trekker currently has 35,000 rivets in stock. Which of the following is true?

Accepted Answer

A)  Due to dependent demand, Trekker does not have an adequate amount of rivets in stock to complete the order. 
B)  Due to independent demand, Trekker does not have an adequate amount of rivets in stock to complete the order. 
C)  Due to dependent demand, Trekker has an adequate amount of rivets in stock to complete the order. 
D)  Due to independent demand, Trekker has an adequate amount of rivets in stock to complete the order.

Question 10

EOQ can only be used for "push" inventory.

Accepted Answer

A) True 
 B)False

Question 11

Henderson Air manufactures heating and air conditioning systems. Recently, the management team decided to implement a new method of classifying inventory based on two key criteria: value (as measured by the contribution to profit) and risk (as measured by the negative impact of not having the product available when needed). Which classification method is Henderson Air using?

Accepted Answer

A)  ABC 
B)  Axis model 
C)  Square-root method 
D)  Quadrant model

Question 12

As Q decreases for EOQ, the cost per order:

Accepted Answer

A)  increases. 
B)  decreases. 
C)  stays the same. 
D)  can't be determined.

Question 13

"Batching economies" and "cycle stocks" are the same.

Accepted Answer

A) True 
 B)False

Question 14

A reason to hold inventory arises when an organization anticipates that an unusual event might occur that will negatively impact its source of supply.

Accepted Answer

A) True 
 B)False

Question 15

Inventory is an asset on the balance sheet and a _____ on the income statement.

Accepted Answer

A)  liability 
B)  footnote 
C)  statement 
D)  variable expense

Question 16

JIT, MRP, and MRP II all incorporate some version of the basic EOQ model into their philosophies.

Accepted Answer

A) True 
 B)False

Question 17

Discuss dependent versus independent demand as it is related to inventory.

Accepted Answer

The answer of Discuss dependent versus independent demand as it...

Exam 9: Managing Inventory in the Supply Chain

The JIT concept has three underlying elements: zero inventories; short, consistent lead times; and small, frequent replenishment quantities.

WIP inventories:

What are push and pull systems? Name at least one inventory management system that is a push or pull system.

Ordering cost refers to the expense of placing an order for additional inventory, including the cost or expense of the product itself.

Compare and contrast the fixed quantity version of EOQ with the fixed interval version. In which situations would each be used?

A DRP system is usually coupled with a _____ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.

Especially for wholesalers and retailers involved in the distribution channels for consumer packaged goods, inventory management is a careful balancing act between:

The reorder point depends on the orders in-house at that time.

Trekker Luggage and Travel Gear needs to manufacture 10,000 suitcases for an upcoming order. Each suitcase requires 4 rivets. Trekker currently has 35,000 rivets in stock. Which of the following is true?

EOQ can only be used for "push" inventory.

As Q decreases for EOQ, the cost per order:

"Batching economies" and "cycle stocks" are the same.

A reason to hold inventory arises when an organization anticipates that an unusual event might occur that will negatively impact its source of supply.

Inventory is an asset on the balance sheet and a _____ on the income statement.

JIT, MRP, and MRP II all incorporate some version of the basic EOQ model into their philosophies.

Discuss dependent versus independent demand as it is related to inventory.