Question 1

Which of the following is the symbol used in the textbook for the cost of placing an order in the fixed-order quantity inventory model?

Accepted Answer

A) C 
B) TC 
C) H 
D) Q 
E) S 
A) C 
B) TC 
C) H 
D) Q 
E) S

Question 2

The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

Accepted Answer

A) True 
 B)False

Question 3

In making any decision that affects inventory size, which of the following costs do not need to be considered?

Accepted Answer

A) Holding costs 
B) Setup costs 
C) Ordering costs 
D) Fixed costs 
E) Shortage costs 
A) Holding costs 
B) Setup costs 
C) Ordering costs 
D) Fixed costs 
E) Shortage costs

Question 4

Which of the following is an assumption of the basic fixed-order quantity inventory model?

Accepted Answer

A) Lead times are averaged 
B) Ordering costs are variable 
C) Price per unit of product is constant 
D) Back orders are allowed 
E) Stock-out costs are high 
A) Lead times are averaged 
B) Ordering costs are variable 
C) Price per unit of product is constant 
D) Back orders are allowed 
E) Stock-out costs are high

Question 5

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

Accepted Answer

A) True 
 B)False

Question 6

If annual demand is 50,000 units, the ordering cost is $25 per order and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?

Accepted Answer

A) 909 
B) 707 
C) 634 
D) 500 
E) 141 
A) 909 
B) 707 
C) 634 
D) 500 
E) 141

Question 7

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price.

Accepted Answer

A) True 
 B)False

Question 8

Some inventory situations involve placing orders to cover only one demand period or to cover short-lived items at frequent intervals.

Accepted Answer

A) True 
 B)False

Question 9

One of the drivers of the direct-to-store (direct distribution) approach is the increase in global sourcing.

Accepted Answer

A) True 
 B)False

Question 10

Using the probability approach we assume that the demand over a period of time is normally distributed.

Accepted Answer

A) True 
 B)False

Question 11

Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit change.

Accepted Answer

A) True 
 B)False

Question 12

The key difference between a fixed-order quantity inventory model, where demand is known and one where demand is uncertain is in computing the reorder point.

Accepted Answer

A) True 
 B)False

Question 13

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price and to check to see whether the lowest cost quantity is feasible.

Accepted Answer

A) True 
 B)False

Question 14

The "sawtooth effect," named after turn-around artist Al "chainsaw" Dunlap, is the severe reduction of inventory and service levels that occurs when a firm has gone through a hostile takeover.

Accepted Answer

A) True 
 B)False

Question 15

The "sawtooth effect," is named after the jagged shape of the graph of inventory levels over time.

Accepted Answer

A) True 
 B)False

Question 16

In the fixed-time period model it is necessary to determine the inventory currently on hand to calculate the size of the order to place with a vendor.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is fixed-order quantity inventory model?

Accepted Answer

A) Economic order quantity model 
B) The ABC model 
C) Periodic replenishment model 
D) Cycle counting model 
E) P model 
A) Economic order quantity model 
B) The ABC model 
C) Periodic replenishment model 
D) Cycle counting model 
E) P model

Question 18

When developing inventory cost models, which of the following is not included as costs to place an order?

Accepted Answer

A) Phone calls 
B) Taxes 
C) Clerical 
D) Calculating quantity to order 
E) Postage 
A) Phone calls 
B) Taxes 
C) Clerical 
D) Calculating quantity to order 
E) Postage

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not one of the categories of manufacturing inventory?

Accepted Answer

A) Raw materials 
B) Finished products 
C) Component parts 
D) Just-in-time 
E) Supplies 
A) Raw materials 
B) Finished products 
C) Component parts 
D) Just-in-time 
E) Supplies

Which of the following is the symbol used in the textbook for the cost of placing an order in the fixed-order quantity inventory model?

The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

In making any decision that affects inventory size, which of the following costs do not need to be considered?

Which of the following is an assumption of the basic fixed-order quantity inventory model?

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

If annual demand is 50,000 units, the ordering cost is $25 per order and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price.

Some inventory situations involve placing orders to cover only one demand period or to cover short-lived items at frequent intervals.

One of the drivers of the direct-to-store (direct distribution) approach is the increase in global sourcing.

Using the probability approach we assume that the demand over a period of time is normally distributed.

Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit change.

The key difference between a fixed-order quantity inventory model, where demand is known and one where demand is uncertain is in computing the reorder point.

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price and to check to see whether the lowest cost quantity is feasible.

The "sawtooth effect," named after turn-around artist Al "chainsaw" Dunlap, is the severe reduction of inventory and service levels that occurs when a firm has gone through a hostile takeover.

The "sawtooth effect," is named after the jagged shape of the graph of inventory levels over time.

In the fixed-time period model it is necessary to determine the inventory currently on hand to calculate the size of the order to place with a vendor.

Which of the following is fixed-order quantity inventory model?

When developing inventory cost models, which of the following is not included as costs to place an order?

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

Which of the following is not one of the categories of manufacturing inventory?

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

Exam 17: Inventory Control

Which of the following is the symbol used in the textbook for the cost of placing an order in the fixed-order quantity inventory model?

The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

In making any decision that affects inventory size, which of the following costs do not need to be considered?

Which of the following is an assumption of the basic fixed-order quantity inventory model?

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

If annual demand is 50,000 units, the ordering cost is $25 per order and the holding cost is $5 per unit per year, which of the following is the optimal order quantity using the fixed-order quantity model?

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price.

Some inventory situations involve placing orders to cover only one demand period or to cover short-lived items at frequent intervals.

One of the drivers of the direct-to-store (direct distribution) approach is the increase in global sourcing.

Using the probability approach we assume that the demand over a period of time is normally distributed.

Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit change.

The key difference between a fixed-order quantity inventory model, where demand is known and one where demand is uncertain is in computing the reorder point.

In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price and to check to see whether the lowest cost quantity is feasible.

The "sawtooth effect," named after turn-around artist Al "chainsaw" Dunlap, is the severe reduction of inventory and service levels that occurs when a firm has gone through a hostile takeover.

The "sawtooth effect," is named after the jagged shape of the graph of inventory levels over time.

In the fixed-time period model it is necessary to determine the inventory currently on hand to calculate the size of the order to place with a vendor.

Which of the following is fixed-order quantity inventory model?

When developing inventory cost models, which of the following is not included as costs to place an order?

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

Which of the following is not one of the categories of manufacturing inventory?

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