Question 1

The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following is usually included as an inventory holding cost?

Accepted Answer

A) Order placing 
B) Breakage 
C) Typing up an order 
D) Quantity discounts 
E) Annualized cost of materials 
A) Order placing 
B) Breakage 
C) Typing up an order 
D) Quantity discounts 
E) Annualized cost of materials B

Question 3

When material is ordered from a vendor, which of the following is not a reason for delays in the order arriving on time?

Accepted Answer

A) Normal variation in shipping time 
B) A shortage of material at the vendor's plant causing backlogs 
C) An unexpected strike at the vendor's plant 
D) A lost order 
E) Redundant ordering systems 
A) Normal variation in shipping time 
B) A shortage of material at the vendor's plant causing backlogs 
C) An unexpected strike at the vendor's plant 
D) A lost order 
E) Redundant ordering systems E

Question 4

Fixed-time period inventory models are "time triggered."

Accepted Answer

A) True 
 B)False

Question 5

Fixed-order quantity systems assume a random depletion of inventory, with less than an immediate order when a reorder point is reached.

Accepted Answer

A) True 
 B)False

Question 6

The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not included as an inventory holding cost?

Accepted Answer

A) Annualized cost of materials 
B) Handling 
C) Insurance 
D) Pilferage 
E) Storage facilities 
A) Annualized cost of materials 
B) Handling 
C) Insurance 
D) Pilferage 
E) Storage facilities

Question 8

Price-break models deal with the fact that the selling price of an item varies with the order size.

Accepted Answer

A) True 
 B)False

Question 9

If the cost to change from producing one product to producing another were zero the lot size would be very small.

Accepted Answer

A) True 
 B)False

Question 10

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered.

Accepted Answer

A) True 
 B)False

Question 11

The costs associated with reduced inventory results in lower profits.

Accepted Answer

A) True 
 B)False

Question 12

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

Accepted Answer

A) True 
 B)False

Question 13

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Accepted Answer

A) True 
 B)False

Question 14

Shortage costs are precise and easy to measure.

Accepted Answer

A) True 
 B)False

Question 15

The average cost of inventory in the United States is 20 to 25 percent of its value.

Accepted Answer

A) True 
 B)False

Question 16

In inventory models, high holding costs tend to favor high inventory levels.

Accepted Answer

A) True 
 B)False

Question 17

Fixed-time period inventory models generate order quantities that vary from time period to time period, depending on the usage rate.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Accepted Answer

A) Ordering or setup costs are constant 
B) Inventory holding cost is based on average inventory 
C) Diminishing returns to scale of holding inventory 
D) Lead time is constant 
E) Demand for the product is uniform throughout the period 
A) Ordering or setup costs are constant 
B) Inventory holding cost is based on average inventory 
C) Diminishing returns to scale of holding inventory 
D) Lead time is constant 
E) Demand for the product is uniform throughout the period

Question 19

Which of the following is a perpetual system for inventory management?

Accepted Answer

A) Fixed-time period 
B) Fixed-order quantity 
C) P model 
D) First-in-first-out 
E) The wheel of inventory 
A) Fixed-time period 
B) Fixed-order quantity 
C) P model 
D) First-in-first-out 
E) The wheel of inventory

Question 20

Fixed-order quantity inventory models are "event triggered."

Accepted Answer

A) True 
 B)False

The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Which of the following is usually included as an inventory holding cost?

When material is ordered from a vendor, which of the following is not a reason for delays in the order arriving on time?

Fixed-time period inventory models are "time triggered."

Fixed-order quantity systems assume a random depletion of inventory, with less than an immediate order when a reorder point is reached.

The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout.

Which of the following is not included as an inventory holding cost?

Price-break models deal with the fact that the selling price of an item varies with the order size.

If the cost to change from producing one product to producing another were zero the lot size would be very small.

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered.

The costs associated with reduced inventory results in lower profits.

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Shortage costs are precise and easy to measure.

The average cost of inventory in the United States is 20 to 25 percent of its value.

In inventory models, high holding costs tend to favor high inventory levels.

Fixed-time period inventory models generate order quantities that vary from time period to time period, depending on the usage rate.

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Which of the following is a perpetual system for inventory management?

Fixed-order quantity inventory models are "event triggered."

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Exam 17: Inventory Control

The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Which of the following is usually included as an inventory holding cost?

When material is ordered from a vendor, which of the following is not a reason for delays in the order arriving on time?

Fixed-time period inventory models are "time triggered."

Fixed-order quantity systems assume a random depletion of inventory, with less than an immediate order when a reorder point is reached.

The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout.

Which of the following is not included as an inventory holding cost?

Price-break models deal with the fact that the selling price of an item varies with the order size.

If the cost to change from producing one product to producing another were zero the lot size would be very small.

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to specify when items should be ordered.

The costs associated with reduced inventory results in lower profits.

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Shortage costs are precise and easy to measure.

The average cost of inventory in the United States is 20 to 25 percent of its value.

In inventory models, high holding costs tend to favor high inventory levels.

Fixed-time period inventory models generate order quantities that vary from time period to time period, depending on the usage rate.

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Which of the following is a perpetual system for inventory management?

Fixed-order quantity inventory models are "event triggered."

Operations and Supply Chain Management

Strategy and Sustainability

Product and Service Design

Strategic Capacity Management

Process Analysis

Production Processes

Service Processes

Health Care Processes

Six-Sigma Quality

Projects

Global Sourcing and Procurement

Location, Logistics and Distribution

Lean and Sustainable Supply Chains

Enterprise Resource Planning Systems

Demand Management and Forecasting

Sales and Operations Planning

Material Requirements Planning

Scheduling

Constraint Management

Filters