Question 1

In a two-bin inventory system, the amount contained in the second bin is equal to the:

Accepted Answer

A) ROP 
B) EOQ 
C) amount in the first bin 
D) optimum stocking level 
E) safety stock 
A) ROP 
B) EOQ 
C) amount in the first bin 
D) optimum stocking level 
E) safety stock

Question 2

In the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few inventory items would be classified as:

Accepted Answer

A) A items 
B) B items 
C) C items 
D) A items plus B items 
E) B items plus C items 
A) A items 
B) B items 
C) C items 
D) A items plus B items 
E) B items plus C items

Question 3

Assuming a thirty-day month, at what point should bills be reordered?

Accepted Answer

A) 0 bills remaining 
B) 417 bills remaining 
C) 2,500 bills remaining 
D) 10,000 bills remaining 
E) 12,500 bills remaining 
A) 0 bills remaining 
B) 417 bills remaining 
C) 2,500 bills remaining 
D) 10,000 bills remaining 
E) 12,500 bills remaining

Question 4

In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

Accepted Answer

A) True 
 B)False

Question 5

Demand for a component averages 80 units per week, with a weekly standard deviation of demand of 14 units.The current supplier of this component offers a four-week lead time.Stockout risk is to be kept at 8%.Assume that it costs $50 to hold one unit in inventory for a year.Suppose the annual cost for the items would be $500 higher if they were purchased from another vendor, but that vendor would offer a two-week lead time.Would it be better to go with the more-expensive but more-responsive vendor?

Accepted Answer

Yes, using the secon

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

A machine is expected to use approximately three spare parts during its useful life.The spares cost $200 each and have no salvage value or other use.The manager has ordered five spares.Assuming a Poisson usage rate, what range of shortage cost is implied?
Ce = $200
Mean = 3 (Poisson)
Cs = ?
Assuming a Poisson-distributed variable with a mean of 3, if stocking 5 units is optimal, this implies that the optimal service level must be between .815 and .916
Thus,

Accepted Answer

@#IMG-DLM& Solving for Cs yiel

Question 8

The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

Accepted Answer

A) True 
 B)False

Question 9

Safety stock is held because we anticipate future demand.

Accepted Answer

A) True 
 B)False

Question 10

A shop that makes candles offers a scented candle, which has a monthly demand of 360 boxes.Candles can be produced at a rate of 36 boxes per day.The shop operates 20 days a month.Assume that demand is uniform throughout the month.Setup cost is $60 for a run, and holding cost is $2 per box on a monthly basis.
Determine the following:
(A) the economic run size
(B) the maximum inventory
(C) the number of days in a run

Accepted Answer

The daily usage rate

Question 11

The total cost curve is relatively flat near the EOQ.

Accepted Answer

A) True 
 B)False

Question 12

Assuming a thirty-day month, if she were to order 6,000 bills at a time, what would be the length of an order cycle?

Accepted Answer

A) 0.48 days 
B) 2.08 days 
C) 6 days 
D) 8.4 days 
E) 14.4 days 
A) 0.48 days 
B) 2.08 days 
C) 6 days 
D) 8.4 days 
E) 14.4 days

Question 13

What is the economic order quantity for pepperoni?

Accepted Answer

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

Question 14

An inventory buffer adds value and lowers cost in all supply chains.

Accepted Answer

A) True 
 B)False

Question 15

If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer?

Accepted Answer

A) $2.00 
B) $4.00 
C) $1.28 
D) $3.28 
E) $2.56 
A) $2.00 
B) $4.00 
C) $1.28 
D) $3.28 
E) $2.56

Question 16

When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves:

Accepted Answer

A) Line up 
B) Equal zero 
C) Do not line up 
D) Cannot be calculated 
E) Depend on the percentage assigned 
A) Line up 
B) Equal zero 
C) Do not line up 
D) Cannot be calculated 
E) Depend on the percentage assigned

Question 17

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

Accepted Answer

A) True 
 B)False

Question 18

If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?

Accepted Answer

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

Question 19

The two basic issues in inventory are how much to order and when to order.

Accepted Answer

A) True 
 B)False

Question 20

The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as 'A' items and low cost items classified as 'C' items.

Accepted Answer

A) True 
 B)False

Exam 13: Inventory Management

In a two-bin inventory system, the amount contained in the second bin is equal to the:

In the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few inventory items would be classified as:

Assuming a thirty-day month, at what point should bills be reordered?

In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.

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

The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.

Safety stock is held because we anticipate future demand.

The total cost curve is relatively flat near the EOQ.

Assuming a thirty-day month, if she were to order 6,000 bills at a time, what would be the length of an order cycle?

What is the economic order quantity for pepperoni?

An inventory buffer adds value and lowers cost in all supply chains.

If he were to order 16 cases of Stein beer at a time, what would be the daily total inventory costs, EXCLUDING the cost of the beer?

When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves:

The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.

If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?

The two basic issues in inventory are how much to order and when to order.

The A-B-C approach involves classifying inventory items by unit cost, with expensive items classified as 'A' items and low cost items classified as 'C' items.

Introduction to Operations Management

Competitiveness, Strategy, and Productivity

Forecasting

Product and Service Design

Strategic Capacity Planning for Products and Services

Process Selection and Facility Layout

Work Design and Measurement

Location Planning and Analysis

Management of Quality

Quality Control

Aggregate Planning and Master Scheduling

MRP and ERP

Jit and Lean Operations

Supply Chain Management

Scheduling

Project Management

Management of Waiting Lines

Linear Programming

Extension 4: Reliability

Extension 5: Decision Theory

Extension 7: Learning Curves

Extension 8: The Transportation Model

Extension 10: Acceptance Sampling

Extension 14: Maintenance

Filters