Question 1

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Accepted Answer

A) True 
 B)False

Question 2

Figure 7-1
Use the graph below to answer the question(s).
  
-In the absence of demand and delivery lead time uncertainty,reorder point is the ____.

Accepted Answer

A)  demand during lead time 
B)  safety stock 
C)  sum of demand during lead time and safety stock 
D)  economic order quantity 
E)  average inventory 
A)  demand during lead time 
B)  safety stock 
C)  sum of demand during lead time and safety stock 
D)  economic order quantity 
E)  average inventory

Question 3

The primary purpose of the basic economic order quantity model is

Accepted Answer

A)  to calculate the reorder point, so that replenishments take place at the proper time 
B)  to minimize the sum of carrying cost and holding cost 
C)  to maximize the customer service level 
D)  to minimize the sum of setup cost and holding cost 
E)  to calculate the optimum safety stock 
A)  to calculate the reorder point, so that replenishments take place at the proper time 
B)  to minimize the sum of carrying cost and holding cost 
C)  to maximize the customer service level 
D)  to minimize the sum of setup cost and holding cost 
E)  to calculate the optimum safety stock

Question 4

The (s,S)continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following cannot be considered as independent demand items?

Accepted Answer

A)  wholesale and retail merchandise items 
B)  maintenance, repair, and operating supplies at a manufacturing company 
C)  maintenance, repair, and operating supplies at a service firm 
D)  raw material items that become part of the final product at a manufacturing firm 
E)  service industry items such as hospital supplies or office supplies for law firms 
A)  wholesale and retail merchandise items 
B)  maintenance, repair, and operating supplies at a manufacturing company 
C)  maintenance, repair, and operating supplies at a service firm 
D)  raw material items that become part of the final product at a manufacturing firm 
E)  service industry items such as hospital supplies or office supplies for law firms

Question 6

The term Cycle Counting is synonymous with physically counting inventory.

Accepted Answer

A) True 
 B)False

Question 7

Electronic Product Code (EPC)is the only RFID standard adopted by the commercial sector and the U.S.Department of Defense.

Accepted Answer

A) True 
 B)False

Question 8

The ABC inventory control system categorizes inventory items into three groups,A,B,and C.A items are given highest priority,while C items have the lowest priority.Prioritization may be based on annual dollar usage,shelf life,or sales volume.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a disadvantage of excessive inventory?

Accepted Answer

A)  It hides production and other problems. 
B)  It leads to higher inventory ordering cost. 
C)  It leads to lower average inventory. 
D)  It eliminates cycle stock. 
E)  It reduces the need to conduct cycle count. 
A)  It hides production and other problems. 
B)  It leads to higher inventory ordering cost. 
C)  It leads to lower average inventory. 
D)  It eliminates cycle stock. 
E)  It reduces the need to conduct cycle count.

Question 10

Dependent demand and independent demand items differ in th at
I.for any product,all components are dependent-demand items
II.the need for independent-demand items is forecast
III.the need for dependent-demand items is calculated
A) I only
B) I & II only.
C) I & III only,
D) II & III only
E) I, II & III

Accepted Answer

The answer of Dependent demand and independent demand items differ...

Question 11

Use the graph below to answer the questions that follow.
   
a.Identify the Annual Holding Cost curve.Provide a brief description of what the Annual Holding Cost curve represents.
b.Identify the Annual Ordering Cost curve.Provide a brief description of what the Annual Ordering Cost curve represents.
c.Identify the Annual Total Cost Curve.Provide a brief description of what the Annual Total Cost curve represents.
d.Identify the Economic Order Quantity.Provide a brief description of what the Economic Order Quantity represents.

Accepted Answer

a.Identify the Annual Holding Cost curve

Question 12

Dependent Demand must be forecasted based on market conditions.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an assumption of the economic order quantity model?

Accepted Answer

A)  Demand is known, constant, and independent. 
B)  Lead time is known and constant. 
C)  Quantity discounts are not possible. 
D)  Production and use can occur simultaneously. 
E)  The only variable costs are setup cost and holding (or carrying) cost. 
A)  Demand is known, constant, and independent. 
B)  Lead time is known and constant. 
C)  Quantity discounts are not possible. 
D)  Production and use can occur simultaneously. 
E)  The only variable costs are setup cost and holding (or carrying) cost.

Question 14

Name the two major RFID standards.

Accepted Answer

a.The Electronic Product Code

Question 15

____,such as lubricants for machines,are used in the production process,but do not become parts of the final products.

Accepted Answer

A)  Raw materials 
B)  Work-in-process 
C)  Maintenance, repair and operating supplies 
D)  Finished goods 
E)  Cycle stock 
A)  Raw materials 
B)  Work-in-process 
C)  Maintenance, repair and operating supplies 
D)  Finished goods 
E)  Cycle stock

Question 16

If usage is constant,as order size increases,annual order costs ____ but annual carrying costs ____.

Accepted Answer

A)  increase ..... increase 
B)  decrease ..... decrease 
C)  increase ..... decrease 
D)  decrease ..... increase 
E)  remain the same ..... increase 
A)  increase ..... increase 
B)  decrease ..... decrease 
C)  increase ..... decrease 
D)  decrease ..... increase 
E)  remain the same ..... increase

Question 17

When demand and lead time are constant,reorder point is the demand during lead time.

Accepted Answer

A) True 
 B)False

Question 18

Figure 7-1
Use the graph below to answer the question(s).
  
-If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model,the average amount of inventory on hand

Accepted Answer

A)  is zero 
B)  is affected by the amount of product cost 
C)  is one-half of the economic order quantity 
D)  is smaller than the holding cost per unit 
E)  cannot be determined from the given information 
A)  is zero 
B)  is affected by the amount of product cost 
C)  is one-half of the economic order quantity 
D)  is smaller than the holding cost per unit 
E)  cannot be determined from the given information

Question 19

If an item is ordered at its economic order quantity,the annual carrying cost should be:

Accepted Answer

A)  slightly less than the annual ordering cost. 
B)  equal to the annual ordering cost. 
C)  twice the annual purchase price. 
D)  the square root of the annual ordering cost. 
E)  cannot be determined because there is insufficient information provided. 
A)  slightly less than the annual ordering cost. 
B)  equal to the annual ordering cost. 
C)  twice the annual purchase price. 
D)  the square root of the annual ordering cost. 
E)  cannot be determined because there is insufficient information provided.

Question 20

The EOQ model with quantity discounts attempts to determine

Accepted Answer

A)  what is the lowest purchasing price. 
B)  whether to use fixed-quantity or fixed period order policy. 
C)  how many units should be ordered. 
D)  what is the shortest lead time. 
E)  what is the lowest amount of inventory necessary to satisfy a certain service level. 
A)  what is the lowest purchasing price. 
B)  whether to use fixed-quantity or fixed period order policy. 
C)  how many units should be ordered. 
D)  what is the shortest lead time. 
E)  what is the lowest amount of inventory necessary to satisfy a certain service level.

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Figure 7-1 Use the graph below to answer the question(s). -In the absence of demand and delivery lead time uncertainty,reorder point is the ____.

The primary purpose of the basic economic order quantity model is

The (s,S)continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.

Which of the following cannot be considered as independent demand items?

The term Cycle Counting is synonymous with physically counting inventory.

Electronic Product Code (EPC)is the only RFID standard adopted by the commercial sector and the U.S.Department of Defense.

The ABC inventory control system categorizes inventory items into three groups,A,B,and C.A items are given highest priority,while C items have the lowest priority.Prioritization may be based on annual dollar usage,shelf life,or sales volume.

Which of the following is a disadvantage of excessive inventory?

Dependent Demand must be forecasted based on market conditions.

Which of the following is not an assumption of the economic order quantity model?

Name the two major RFID standards.

____,such as lubricants for machines,are used in the production process,but do not become parts of the final products.

If usage is constant,as order size increases,annual order costs but annual carrying costs .

When demand and lead time are constant,reorder point is the demand during lead time.

Figure 7-1 Use the graph below to answer the question(s). -If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model,the average amount of inventory on hand

If an item is ordered at its economic order quantity,the annual carrying cost should be:

The EOQ model with quantity discounts attempts to determine

Introduction to Supply Chain Management

Purchasing Management

Creating and Managing Supplier Relationships

Ethical and Sustainable Sourcing

Demand Forecasting

Resource Planning Systems

Process Management: Lean and Six Sigma in the Supply Chain

Domestic U.S.and Global Logistics

Customer Relationship Management

Global Location Decisions

Service Response Logistics

Supply Chain Process Integration

Performance Measurement Along the Supply Chain

Filters

Exam 7: Inventory Management

In the Economic Manufacturing Quantity model,the annual consumption rate must be higher than the annual production rate.

Figure 7-1 Use the graph below to answer the question(s). -In the absence of demand and delivery lead time uncertainty,reorder point is the ____.

The primary purpose of the basic economic order quantity model is

The (s,S)continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.

Which of the following cannot be considered as independent demand items?

The term Cycle Counting is synonymous with physically counting inventory.

Electronic Product Code (EPC)is the only RFID standard adopted by the commercial sector and the U.S.Department of Defense.

The ABC inventory control system categorizes inventory items into three groups,A,B,and C.A items are given highest priority,while C items have the lowest priority.Prioritization may be based on annual dollar usage,shelf life,or sales volume.

Which of the following is a disadvantage of excessive inventory?

Dependent Demand must be forecasted based on market conditions.

Which of the following is not an assumption of the economic order quantity model?

Name the two major RFID standards.

____,such as lubricants for machines,are used in the production process,but do not become parts of the final products.

If usage is constant,as order size increases,annual order costs ____ but annual carrying costs ____.

When demand and lead time are constant,reorder point is the demand during lead time.

Figure 7-1 Use the graph below to answer the question(s). -If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the model,the average amount of inventory on hand

If an item is ordered at its economic order quantity,the annual carrying cost should be:

The EOQ model with quantity discounts attempts to determine

Introduction to Supply Chain Management

Purchasing Management

Creating and Managing Supplier Relationships

Ethical and Sustainable Sourcing

Demand Forecasting

Resource Planning Systems

Process Management: Lean and Six Sigma in the Supply Chain

Domestic U.S.and Global Logistics

Customer Relationship Management

Global Location Decisions

Service Response Logistics

Supply Chain Process Integration

Performance Measurement Along the Supply Chain

Filters

If usage is constant,as order size increases,annual order costs but annual carrying costs .