Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following are fixed-time period inventory models?

Accepted Answer

A) The EOQ model 
B) The least cost method 
C) The Q model 
D) Periodic system model 
E) Just-in-time model 
A) The EOQ model 
B) The least cost method 
C) The Q model 
D) Periodic system model 
E) Just-in-time model

Question 3

In a price break model of lot sizing the lowest cost quantity is always feasible.

Accepted Answer

A) True 
 B)False

Question 4

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 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the level of quality to specify.

Accepted Answer

A) True 
 B)False

Question 9

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 10

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between customer satisfaction and cost to serve.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Assuming no safety stock,what is the reorder point (R)given an average daily demand of 78 units and a lead time of 3 days?

Accepted Answer

A) 421 
B) 234 
C) 78 
D) 26 
E) 312 
A) 421 
B) 234 
C) 78 
D) 26 
E) 312

Question 13

If a vendor has correctly used marginal analysis to select their stock levels for the day (as in the newsperson problem),and the profit resulting from the last unit being sold (Cu)is $0.90 and the loss resulting from that unit if it is not sold (Co)is $0.50,which of the following is the probability of the last unit being sold?

Accepted Answer

A) Greater than 0.357 
B) Greater than 0.400 
C) Greater than 0.556 
D) Greater than 0.678 
E) None of these 
A) Greater than 0.357 
B) Greater than 0.400 
C) Greater than 0.556 
D) Greater than 0.678 
E) None of these

Question 14

Savings from reduced inventory results in increased profit.

Accepted Answer

A) True 
 B)False

Question 15

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 16

In inventory models,high holding costs tend to favor low inventory levels and frequent replenishment.

Accepted Answer

A) True 
 B)False

Question 17

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between transportation costs and fulfillment speed.

Accepted Answer

A) True 
 B)False

Question 18

The Pareto principle is best applied to which of the following inventory systems?

Accepted Answer

A) EOQ 
B) Fixed-time period 
C) ABC classification 
D) Fixed-order quantity 
E) Single-period ordering system 
A) EOQ 
B) Fixed-time period 
C) ABC classification 
D) Fixed-order quantity 
E) Single-period ordering system

Question 19

If a vendor has correctly used marginal analysis to select their stock levels for the day (as in the newsperson problem),and the profit resulting from the last unit being sold (Cu)is $120 and the loss resulting from that unit if it is not sold (Co)is $360,which of the following is the probability of the last unit being sold?

Accepted Answer

A) Greater than 0.90 
B) Greater than 0.85 
C) Greater than 0.75 
D) Greater than 0.25 
E) None of these 
A) Greater than 0.90 
B) Greater than 0.85 
C) Greater than 0.75 
D) Greater than 0.25 
E) None of these

Question 20

Using the fixed-time period inventory model,and given an average daily demand of 75 units,10 days between inventory reviews,2 days for lead time,50 units of inventory on hand,a service probability of 95 percent,and a standard deviation of demand over the review and lead time of 8 units,which of the following is the order quantity?

Accepted Answer

A) 863 
B) 948 
C) 1,044 
D) 1,178 
E) 4,510 
A) 863 
B) 948 
C) 1,044 
D) 1,178 
E) 4,510

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

Which of the following are fixed-time period inventory models?

In a price break model of lot sizing the lowest cost quantity is always feasible.

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

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

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

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

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the level of quality to specify.

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

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between customer satisfaction and cost to serve.

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

Assuming no safety stock,what is the reorder point (R)given an average daily demand of 78 units and a lead time of 3 days?

Savings from reduced inventory results in increased profit.

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 inventory models,high holding costs tend to favor low inventory levels and frequent replenishment.

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between transportation costs and fulfillment speed.

The Pareto principle is best applied to which of the following inventory systems?

Operations and Supply Chain Management

Strategy and Sustainability

Forecasting

Strategic Capacity Management

PART-A: Learning Curves

Projects Manufacturing and Service Processes

Manufacturing Processes

PART-A: Break-Even Analysis

Service Processes

Sales and Operations Planning

Material Requirements Planning

Quality Management and Six-Sigma Supply Chain Processes and Analytics

Lean Supply Chains

Global Sourcing and Procurement

Location, Logistics and Distribution

Filters

Exam 11: Inventory Management

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

Which of the following are fixed-time period inventory models?

In a price break model of lot sizing the lowest cost quantity is always feasible.

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

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

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

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

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine the level of quality to specify.

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

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between customer satisfaction and cost to serve.

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

Assuming no safety stock,what is the reorder point (R)given an average daily demand of 78 units and a lead time of 3 days?

Savings from reduced inventory results in increased profit.

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 inventory models,high holding costs tend to favor low inventory levels and frequent replenishment.

One of the daily,delicate balancing acts that Logistics managers have to perform involves the trade-off between transportation costs and fulfillment speed.

The Pareto principle is best applied to which of the following inventory systems?

Operations and Supply Chain Management

Strategy and Sustainability

Forecasting

Strategic Capacity Management

PART-A: Learning Curves

Projects Manufacturing and Service Processes

Manufacturing Processes

PART-A: Break-Even Analysis

Service Processes

Sales and Operations Planning

Material Requirements Planning

Quality Management and Six-Sigma Supply Chain Processes and Analytics

Lean Supply Chains

Global Sourcing and Procurement

Location, Logistics and Distribution

Filters