Question 1

All of the following are possible reasons for using the fixed-order-interval model except:

Accepted Answer

A)  supplier policy encourages use. 
B)  grouping orders can save in shipping costs. 
C)  the required safety stock is lower than with an EOQ/ROP model. 
D)  it is suited to periodic checks of inventory levels rather than continuous monitoring. 
E)  continuous monitoring is not practical. 
A)  supplier policy encourages use. 
B)  grouping orders can save in shipping costs. 
C)  the required safety stock is lower than with an EOQ/ROP model. 
D)  it is suited to periodic checks of inventory levels rather than continuous monitoring. 
E)  continuous monitoring is not practical.

Question 2

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If order size was 1,000 kilograms of resin, what would be the length of an order cycle?

Accepted Answer

A)  .05 days 
B)  4 days 
C)  16 days 
D)  20 days 
E)  50 days 
A)  .05 days 
B)  4 days 
C)  16 days 
D)  20 days 
E)  50 days

Question 3

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average daily total inventory costs, EXCLUDING the cost of the resin?

Accepted Answer

A)  $5 
B)  $10 
C)  $20 
D)  $25 
E)  $40 
A)  $5 
B)  $10 
C)  $20 
D)  $25 
E)  $40

Question 4

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

Accepted Answer

A)  100 
B)  80 
C)  60 
D)  40 
E)  20 
A)  100 
B)  80 
C)  60 
D)  40 
E)  20

Question 5

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Accepted Answer

A) True 
 B)False

Question 6

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Accepted Answer

A) True 
 B)False

Question 7

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Accepted Answer

A) True 
 B)False

Question 8

Which of these products would be most apt to involve the use of a single-period model?

Accepted Answer

A)  gold coins 
B)  hammers 
C)  fresh fish 
D)  calculators 
E)  frozen corn 
A)  gold coins 
B)  hammers 
C)  fresh fish 
D)  calculators 
E)  frozen corn

All of the following are possible reasons for using the fixed-order-interval model except:

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Which of these products would be most apt to involve the use of a single-period model?

Introduction to Operations Management

Competitiveness

Forecasting

Product and Service Design

RELIABILITY – Static

Strategic Capacity Planning for Products and Services

Decision Theory– Static

Process Selection and Facility Layout

Work Design and Measurement

learning curve– Static

Location Planning and Analysis

The Transportation Model– Static

Management of Quality

Quality Control

Acceptance Sampling– Static

Aggregate Planning and Master Scheduling

MRP and ERP

JIT and Lean Operations

Maintenance– Static

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters

Exam 18: Inventory Management

All of the following are possible reasons for using the fixed-order-interval model except:

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Which of these products would be most apt to involve the use of a single-period model?

Introduction to Operations Management

Competitiveness

Forecasting

Product and Service Design

RELIABILITY – Static

Strategic Capacity Planning for Products and Services

Decision Theory– Static

Process Selection and Facility Layout

Work Design and Measurement

learning curve– Static

Location Planning and Analysis

The Transportation Model– Static

Management of Quality

Quality Control

Acceptance Sampling– Static

Aggregate Planning and Master Scheduling

MRP and ERP

JIT and Lean Operations

Maintenance– Static

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Filters