Question 1

________ systems are systems in which an item's inventory position is reviewed periodically rather than continuously.

Accepted Answer

The answer of ________ systems are systems in which an...

Question 2

A(n)________ is an item made to order or,if purchased,is bought to order.

Accepted Answer

The answer of A(n)________ is an item made to order...

Question 3

For wholesale and retail businesses,maintaining high levels of customer service translates into pressures to maintain relatively low inventory levels.

Accepted Answer

A) True 
 B)False

Question 4

The percentage of demand for an item that is met from on-hand inventory,relative to the total demand for that item is referred to as the

Accepted Answer

A)  safety stock ratio. 
B)  cycle service ratio. 
C)  item fill rate. 
D)  reorder rate. 
A)  safety stock ratio. 
B)  cycle service ratio. 
C)  item fill rate. 
D)  reorder rate.

Question 5

One of the secondary levers for reducing pipeline inventory is to

Accepted Answer

A)  offer seasonal pricing plans. 
B)  increase capacity cushions. 
C)  accept only large orders. 
D)  select more responsive suppliers. 
A)  offer seasonal pricing plans. 
B)  increase capacity cushions. 
C)  accept only large orders. 
D)  select more responsive suppliers.

Question 6

Table 5.5
You are the operations manager of a firm that uses the continuous review inventory control system. Suppose the firm operates 52 weeks a year and has the following characteristics for its primary item:
Demand = 25,000 units/year
Ordering cost = $30/order
Holding cost = $8/unit/year
Lead time = 2 weeks
Standard deviation in weekly demand = 100 units
You will need to refer to a normal table to answer the question(s).
-Use the information in Table 5.5.What is the economic order quantity for this item?

Accepted Answer

A)  less than 400 units 
B)  greater than 400 but less than or equal to 450 units 
C)  greater than 450 but less than or equal to 500 units 
D)  greater than 500 units 
A)  less than 400 units 
B)  greater than 400 but less than or equal to 450 units 
C)  greater than 450 but less than or equal to 500 units 
D)  greater than 500 units

Question 7

The ________ determines the frequency and quantity to order.

Accepted Answer

The answer of The ________ determines the frequency and quantity...

Question 8

Table 5.3
The Medfield Import Autoparts Company imports and sells standard air filters for most Japanese cars, and it operates under the continuous review system. The average demand for this item is 1200 units per month (14,400 per year), and the standard deviation in monthly demand is 250 units. It costs the company $225 to process each order, and the lead time is 2 months. The holding cost for one unit is $0.50 per year, and the company policy is to maintain a 95 percent cycle-service level. You will need to refer to a normal table to answer the question(s).
-Use the information in Table 5.3.What is the reorder point R to satisfy a 95 percent cycle-service level?

Accepted Answer

A)  less than or equal to 2800 units 
B)  greater than 2800 units but less than or equal to 2900 units 
C)  greater than 2900 units but less than or equal to 3000 units 
D)  greater than 3000 units 
A)  less than or equal to 2800 units 
B)  greater than 2800 units but less than or equal to 2900 units 
C)  greater than 2900 units but less than or equal to 3000 units 
D)  greater than 3000 units

Question 9

Demand for an item is 1000 units per week,with a standard deviation in weekly demand of 60 units.The lead time is 2 weeks.The company wants to maintain an 88 percent cycle-service level.Assume demand during lead time to be normally distributed.For a continuous review system,what should be the reorder point? A normal table is attached at the end of this exam.

Accepted Answer

A)  less than or equal to 2075 
B)  greater than 2075 but less than or equal to 2085 
C)  greater than 2085 but less than or equal to 2095 
D)  greater than 2095 
A)  less than or equal to 2075 
B)  greater than 2075 but less than or equal to 2085 
C)  greater than 2085 but less than or equal to 2095 
D)  greater than 2095

Question 10

An inventory system answers two important questions: when to order and how much to order.Which of the following statements correctly explains how a Q system (continuous review system)or a P system (periodic review system)answers these questions?

Accepted Answer

A)  Under a Q system, a fixed quantity is ordered every P time period. 
B)  Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R. 
C)  Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R. 
D)  Under a P system, an order is placed to replenish the inventory position up to the target level T every P time period. 
A)  Under a Q system, a fixed quantity is ordered every P time period. 
B)  Under a Q system, an order is placed to replenish the inventory position up to the target level T when the inventory position reaches the reorder point R. 
C)  Under a P system, a fixed quantity Q is ordered when the inventory position reaches the reorder point R. 
D)  Under a P system, an order is placed to replenish the inventory position up to the target level T every P time period.

Question 11

Even though the economic order quantity (EOQ)is optimal only when five assumptions are satisfied,it serves as a reasonable first approximation even when these assumptions do not quite apply.Which one of the following is NOT an assumption of the EOQ?

Accepted Answer

A)  Decisions for one item can be made independently of decisions made for other items. 
B)  There is no uncertainty in lead time. 
C)  The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop. 
D)  Quantity discounts can be taken advantage of for large lot sizes. 
A)  Decisions for one item can be made independently of decisions made for other items. 
B)  There is no uncertainty in lead time. 
C)  The amount of an order received is exactly equal to what was ordered, without any "short shipments" from a supplier or scrap losses in the shop. 
D)  Quantity discounts can be taken advantage of for large lot sizes.

Question 12

A company is more likely to place its inventory close to customers as finished goods for standard items than it is for special items.

Accepted Answer

A) True 
 B)False

Question 13

________ demand items are items for which demand is influenced by market conditions and is not related to the inventory decisions for any other item held in stock.

Accepted Answer

The answer of ________ demand items are items for which...

Question 14

Cycle counting is an inventory control method whereby storeroom personnel physically count a small percent of the total number of items each day.

Accepted Answer

A) True 
 B)False

Question 15

Compare and contrast the continuous review (Q)and the periodic review (P)systems of inventory control.

Accepted Answer

The primary advantages of the P system a

Question 16

For a company that manufactures most of its products as standards,more inventory should be placed

Accepted Answer

A)  closer to the customer. 
B)  within the plant as work-in-process. 
C)  close to suppliers. 
D)  equally distributed between the plants and warehouses. 
A)  closer to the customer. 
B)  within the plant as work-in-process. 
C)  close to suppliers. 
D)  equally distributed between the plants and warehouses.

Question 17

Which one of the following statements about inventory control systems is TRUE?

Accepted Answer

A)  A two-bin inventory system is essentially a P system because the inventory is reviewed only on a periodic basis. 
B)  An optional replenishment system is particularly attractive when both review and ordering costs are significant. 
C)  Visual systems are difficult to administer because records on current inventory position have to be kept for every item. 
D)  Overstocking is quite common for those items that are managed by using the base-stock system. 
A)  A two-bin inventory system is essentially a P system because the inventory is reviewed only on a periodic basis. 
B)  An optional replenishment system is particularly attractive when both review and ordering costs are significant. 
C)  Visual systems are difficult to administer because records on current inventory position have to be kept for every item. 
D)  Overstocking is quite common for those items that are managed by using the base-stock system.

Question 18

Pipeline inventory is inventory that is moved from point to point within the material flow system.

Accepted Answer

A) True 
 B)False

Question 19

________ is the desired probability of not running out of stock in any one order cycle.

Accepted Answer

The answer of ________ is the desired probability of not...

Question 20

Holding inventory at the raw materials level rather than as finished goods reduces the cost of carrying inventory but also results in longer delivery times.

Accepted Answer

A) True 
 B)False

________ systems are systems in which an item's inventory position is reviewed periodically rather than continuously.

A(n)________ is an item made to order or,if purchased,is bought to order.

For wholesale and retail businesses,maintaining high levels of customer service translates into pressures to maintain relatively low inventory levels.

The percentage of demand for an item that is met from on-hand inventory,relative to the total demand for that item is referred to as the

One of the secondary levers for reducing pipeline inventory is to

The ________ determines the frequency and quantity to order.

An inventory system answers two important questions: when to order and how much to order.Which of the following statements correctly explains how a Q system (continuous review system)or a P system (periodic review system)answers these questions?

Even though the economic order quantity (EOQ)is optimal only when five assumptions are satisfied,it serves as a reasonable first approximation even when these assumptions do not quite apply.Which one of the following is NOT an assumption of the EOQ?

A company is more likely to place its inventory close to customers as finished goods for standard items than it is for special items.

________ demand items are items for which demand is influenced by market conditions and is not related to the inventory decisions for any other item held in stock.

Cycle counting is an inventory control method whereby storeroom personnel physically count a small percent of the total number of items each day.

Compare and contrast the continuous review (Q)and the periodic review (P)systems of inventory control.

For a company that manufactures most of its products as standards,more inventory should be placed

Which one of the following statements about inventory control systems is TRUE?

Pipeline inventory is inventory that is moved from point to point within the material flow system.

________ is the desired probability of not running out of stock in any one order cycle.

Holding inventory at the raw materials level rather than as finished goods reduces the cost of carrying inventory but also results in longer delivery times.

Creating Customer Value through Operations

Supply Chain Management

Process Configuration

Capacity

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Waiting Lines

Filters

Exam 5: Inventory Management

________ systems are systems in which an item's inventory position is reviewed periodically rather than continuously.

A(n)________ is an item made to order or,if purchased,is bought to order.

For wholesale and retail businesses,maintaining high levels of customer service translates into pressures to maintain relatively low inventory levels.

The percentage of demand for an item that is met from on-hand inventory,relative to the total demand for that item is referred to as the

One of the secondary levers for reducing pipeline inventory is to

The ________ determines the frequency and quantity to order.

An inventory system answers two important questions: when to order and how much to order.Which of the following statements correctly explains how a Q system (continuous review system)or a P system (periodic review system)answers these questions?

Even though the economic order quantity (EOQ)is optimal only when five assumptions are satisfied,it serves as a reasonable first approximation even when these assumptions do not quite apply.Which one of the following is NOT an assumption of the EOQ?

A company is more likely to place its inventory close to customers as finished goods for standard items than it is for special items.

________ demand items are items for which demand is influenced by market conditions and is not related to the inventory decisions for any other item held in stock.

Cycle counting is an inventory control method whereby storeroom personnel physically count a small percent of the total number of items each day.

Compare and contrast the continuous review (Q)and the periodic review (P)systems of inventory control.

For a company that manufactures most of its products as standards,more inventory should be placed

Which one of the following statements about inventory control systems is TRUE?

Pipeline inventory is inventory that is moved from point to point within the material flow system.

________ is the desired probability of not running out of stock in any one order cycle.

Holding inventory at the raw materials level rather than as finished goods reduces the cost of carrying inventory but also results in longer delivery times.

Creating Customer Value through Operations

Supply Chain Management

Process Configuration

Capacity

Quality and Process Improvement

Lean Systems

Managing Projects

Location and Layout

Managing Demand and Forecasting

Operations Planning and Scheduling

Resource Planning

Decision Making

Financial Analysis

Work Measurement

Learning Curve Analysis

Computer-Integrated Manufacturing

Acceptance Sampling Plans

Simulation

Special Inventory Models

Linear Programming

Waiting Lines

Filters