Exam 11: Managing Inventories in Supply Chains

Setup costs include costs associated with maintaining storage facilities, such as gas and electricity, taxes, and insurance.

Which of the following statements is true of backorders

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

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

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

In the context of ABC inventory analysis, which of the following statements is true of class C items

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 _____.

Stable demand is usually called__________.

A single-period inventory problem can be solved using a technique called:

_____ consists of partially completed products in various stages of completion that are awaiting further processing.

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

A buyer for a department store orders sweaters about 6 months before the winter season. The store plans to hold a March clearance sale to sell any surplus goods by February 29. Each piece costs $100 per pair and sells for $120 per pair. At the sale price of $60 per pair, it is expected that any remaining stock can be sold during the March sale. Assume that a uniform probability distribution ranging from 250 to 450 items describes the demand. The expected demand is 300. In the context of the single period inventory system, the optimal order size Qmust satisfy the condition _____.

Net Steels is a steel manufacturing company. It orders 180 metric tons of raw material per order. It was observed that the company often faces stockout. To tackle this issue, the company incorporated a fixed-quantity system (FQS) and collected the following data. Demand 11,000 metric tons per year Order Cost \ 18,000 per order Item Cost \ 36,000 per year Inventory-Holding Cost 20 percent per year Using the data, Net Steels determined that the economic order quantity (EOQ) should be 235 metric tons. In this scenario, the annual amount that Net Steels can save by ordering as per the EOQ instead of its conventional order is:

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 _____.

In the context of fixed-quantity systems,__________is defined as the on-hand quantity (OH) plus any orders placed but which have not arrived minus any backorders (BO).

Which of the following statements is true of a fixed-period system (FPS)