Exam 9: Managing Inventory in the Supply Chain

Inventory plays a dual role in organizations. Inventory impacts the cost of goods sold as well as supporting the balance sheet, a new concept only recently receiving attention.

Seasonal stocks are not influenced by:

Batching economies or cycle stocks usually arise from three sources. Which of these is not a source?

Perpetual inventory systems are required for any EOQ model having _____ demand while periodic inventory systems are used for EOQ models having _____ demand.

What are push and pull systems, and name at least one inventory management system that is a push or pull system?

Capital cost is also called interest or opportunity cost.

A reason to hold inventory arises when an organization anticipates that an unusual event might occur that will negatively impact its source of supply.

As Q decreases for EOQ, the cost per order:

JIT is a _____ system.

What is Vendor Managed Inventory?

In comparison with the basic EOQ approach, the fixed interval model does not require close surveillance of inventory levels.

In the event of a "stockout" one of the things that could happen is:

A DRP system is usually coupled with a _____ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.

Ordering cost refers to the expense of placing an order for additional inventory and does not include the cost or expense of the product itself.

MRPII will not allow an organization to integrate financial planning with operations and logistics.

Purchase economies and transportation economies are not complementary.

JIT, MRP, and MRP II all incorporate some version of the basic EOQ model into their philosophies.

The ABC analysis is based on Pareto's law.

"Batching economies" and "cycle stocks" are the same.

Discuss how seasonality can affect inventory.