Exam 20: Inventory Management

A company has recorded the last five days of daily demand on its only product.Those values are 120, 125, 124, 128, and 133.The time from when an order is placed to when it arrives at the company from its vendor is 5 days.Assuming the basic fixed-order-quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R)?

One of the daily, delicate balancing acts that logistics managers have to perform involves the trade-off between inventory costs and the cost of stock-outs.

Fixed-time-period inventory models are "event triggered."

Fixed-time-period inventory models generate order quantities that vary from time period to time period, depending on the usage rate.

Which of the following is not necessary to compute the order quantity using the fixed-time-period model with safety stock?

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

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

Using the fixed-time-period inventory model, and given an average daily demand of 200 units, 4 days between inventory reviews, 5 days for lead time, 120 units of inventory on hand, a z of 1.96, and a standard deviation of demand over the review and lead time of 3 units, which of the following is the order quantity?

Using the fixed-order-quantity model, which of the following is the total ordering cost of inventory given an annual demand of 36,000 units, a cost per order of $80, and a holding cost per unit per year of $4?

Fixed-time-period inventory models are "time triggered."

Which of the following is one of the categories of manufacturing inventory?

Fixed-order-quantity inventory models are "time triggered."

An inventory system is a set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be.

If it takes a supplier 4 days to deliver an order once it has been placed and the standard deviation of daily demand is 10, which of the following is the standard deviation of usage during lead time?

Using the ABC classification system for inventory, which of the following is a true statement?

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

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

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

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

Distinguish between dependent and independent demand.How are these demands treated differently?