Question 1

What is MRO an acronym for? What is the function of MRO inventories?

Accepted Answer

MRO inventories are devoted to

Question 2

Typically, a more expensive shipping option is:

Accepted Answer

A)  slower with a lower holding cost. 
B)  slower with a higher holding cost. 
C)  faster with a lower holding cost. 
D)  faster with a higher holding cost. 
E)  faster, but holding cost is unaffected by delivery speed. 
A)  slower with a lower holding cost. 
B)  slower with a higher holding cost. 
C)  faster with a lower holding cost. 
D)  faster with a higher holding cost. 
E)  faster, but holding cost is unaffected by delivery speed.

Question 3

________ is extra stock that is carried to serve as a buffer.

Accepted Answer

The answer of ________ is extra stock that is carried...

Question 4

Over the past six months, Wholesale Foods of Fresno has experienced a standard deviation of demand of 200 units. Standard deviation of its orders during that period was 300 units.
(a) What is the bullwhip measure for Wholesale Foods of Fresno?
(b) If Wholesale Foods of Fresno had made a perfect forecast of demand over the past 6 months and had decided to order 1/6 of that demand each month, what would its bullwhip measure have been?

Accepted Answer

(a) Variance of orders / Variance of dem

Question 5

Explain what "decoupling" means in the context of inventory management.

Accepted Answer

Decoupling means to separate v

Question 6

An advantage of the fixed-period inventory system is that:

Accepted Answer

A)  safety stock will be lower than it would be under a fixed-quantity inventory system. 
B)  there is no physical count of inventory items when an item is withdrawn. 
C)  no inventory records are required. 
D)  orders usually are for smaller order quantities. 
E)  the average inventory level is reduced. 
A)  safety stock will be lower than it would be under a fixed-quantity inventory system. 
B)  there is no physical count of inventory items when an item is withdrawn. 
C)  no inventory records are required. 
D)  orders usually are for smaller order quantities. 
E)  the average inventory level is reduced.

Question 7

________ is a continuing reconciliation of inventory with inventory records.

Accepted Answer

The answer of ________ is a continuing reconciliation of inventory...

Question 8

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from retailers toward suppliers.

Accepted Answer

A) True 
 B)False

Question 9

Identify at least four factors in addition to delivery speed (and its impact on holding cost) that may need to be considered when choosing the best mode of shipment.

Accepted Answer

The four presented in the text are: (1)

Question 10

In the quantity discount model, the cost of acquiring goods (product cost) is a factor in determining lot size.

Accepted Answer

A) True 
 B)False

Question 11

Demand for gallons of milk (a perishable item) is normally distributed with a weekly mean of 50 and standard deviation of 15. How many additional gallons of milk must be stocked to increase the service level from 50% to 80%?

Accepted Answer

Z for 50% is 0, Z for 80% is .

Question 12

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers?

Accepted Answer

A)  lower L, lower C 
B)  lower L, higher C 
C)  higher L, lower C 
D)  higher L, higher C 
E)  lower L, higher C, lower S 
A)  lower L, lower C 
B)  lower L, higher C 
C)  higher L, lower C 
D)  higher L, higher C 
E)  lower L, higher C, lower S

Question 13

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very back (furthest away from the dock)?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Question 14

The two most basic inventory questions answered by the typical inventory model are:

Accepted Answer

A)  timing of orders and cost of orders. 
B)  order quantity and cost of orders. 
C)  timing of orders and order quantity. 
D)  order quantity and service level. 
E)  ordering cost and carrying cost. 
A)  timing of orders and cost of orders. 
B)  order quantity and cost of orders. 
C)  timing of orders and order quantity. 
D)  order quantity and service level. 
E)  ordering cost and carrying cost.

Question 15

In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.

Accepted Answer

A) True 
 B)False

Question 16

Consider the all-units quantity discount schedule below. Which of the following CANNOT be the optimal ordering quantity?

Accepted Answer

A)  891 
B)  922 
C)  1000 
D)  1500 
E)  2000 
A)  891 
B)  922 
C)  1000 
D)  1500 
E)  2000

Question 17

________ is the complement of the probability of a stockout.

Accepted Answer

The answer of ________ is the complement of the probability...

Question 18

The most expensive items in a warehouse should be placed near the dock.

Accepted Answer

A) True 
 B)False

Question 19

What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 25, and a variance of orders equal to 450?

Accepted Answer

A)  1.3889 
B)  0.0556 
C)  1.125 
D)  0.72 
E)  18 
A)  1.3889 
B)  0.0556 
C)  1.125 
D)  0.72 
E)  18

Question 20

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very back (furthest away from the dock)?

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
E)  E 
A)  A 
B)  B 
C)  C 
D)  D 
E)  E

Exam 11: Inventory Management

What is MRO an acronym for? What is the function of MRO inventories?

Typically, a more expensive shipping option is:

________ is extra stock that is carried to serve as a buffer.

Explain what "decoupling" means in the context of inventory management.

An advantage of the fixed-period inventory system is that:

________ is a continuing reconciliation of inventory with inventory records.

The bullwhip effect describes the tendency for larger order size fluctuations in the supply chain as orders move from retailers toward suppliers.

Identify at least four factors in addition to delivery speed (and its impact on holding cost) that may need to be considered when choosing the best mode of shipment.

In the quantity discount model, the cost of acquiring goods (product cost) is a factor in determining lot size.

Demand for gallons of milk (a perishable item) is normally distributed with a weekly mean of 50 and standard deviation of 15. How many additional gallons of milk must be stocked to increase the service level from 50% to 80%?

Under the disaster risk decision tree model, which of the following conditions would create the HIGHEST incentive to use MORE suppliers?

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very back (furthest away from the dock)?

The two most basic inventory questions answered by the typical inventory model are:

In the simple EOQ model, if annual demand were to increase, the EOQ would increase proportionately.

Consider the all-units quantity discount schedule below. Which of the following CANNOT be the optimal ordering quantity?

________ is the complement of the probability of a stockout.

The most expensive items in a warehouse should be placed near the dock.

What is the value of the bullwhip measure for a company with a standard deviation of demand equal to 25, and a variance of orders equal to 450?

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very back (furthest away from the dock)?

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