Question 1

Interest, insurance, and opportunity costs are all associated with holding costs.

Accepted Answer

A) True 
 B)False

Question 2

In the fixed-order interval model, the order size is the same for each order.

Accepted Answer

A) True 
 B)False

Question 3

In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a majority of the 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 4

In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.

Accepted Answer

A) True 
 B)False

Question 5

ROP models indicate to managers the time between orders.

Accepted Answer

A) True 
 B)False

Question 6

If the order size was 1,000 kilograms of resin, what would be the average inventory level?

Accepted Answer

A) 50 kilograms 
B) 200 kilograms 
C) 500 kilograms 
D) 800 kilograms 
E) 1,000 kilograms 
A) 50 kilograms 
B) 200 kilograms 
C) 500 kilograms 
D) 800 kilograms 
E) 1,000 kilograms

Question 7

If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

Accepted Answer

A) 0.25 days 
B) 3 days 
C) 1 day 
D) 4 days 
E) 20 days 
A) 0.25 days 
B) 3 days 
C) 1 day 
D) 4 days 
E) 20 days

Question 8

A non-linear cost related to order size is the cost of:

Accepted Answer

A) interest 
B) insurance 
C) taxes 
D) receiving 
E) space 
A) interest 
B) insurance 
C) taxes 
D) receiving 
E) space

Question 9

Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with an average of 15 gallons/day and a standard deviation of two gallons/day.Harry has just fired the manager and taken over operating the restaurant himself.Harry has asked you to help him decide how to reorder cooking oil in order to achieve a service level which is seven times the risk of stockout (7/8).Lead time is eight days.Assume that cooking oil can be ordered as needed.

Accepted Answer

@#IMG-DLM& = 15 gallons per day; @#IMG-DLM& = 2 ga

Question 10

For the economic order quantity, what is the reorder point?

Accepted Answer

The answer of For the economic order quantity, what is...

Question 11

When to order can be calculated by the ROP and expressed as a quantity.

Accepted Answer

A) True 
 B)False

Question 12

A retail store that carries twice the inventory as its competitor will provide twice the customer service level.

Accepted Answer

A) True 
 B)False

Question 13

For the economic order quantity, what is the average inventory level?

Accepted Answer

The answer of For the economic order quantity, what is...

Question 14

EOQ inventory models are basically concerned with the timing of orders.

Accepted Answer

A) True 
 B)False

Question 15

Quantity discounts are generally given for large number of orders.

Accepted Answer

A) True 
 B)False

Question 16

In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent.

Accepted Answer

A) 100 
B) 67 
C) 50 
D) 33 
E) 5 
A) 100 
B) 67 
C) 50 
D) 33 
E) 5

Question 17

Given the following information:
Order quantity = 300;

Accepted Answer

@#IMG-DLM& = 20 units; desired lead time service l

Question 18

The rate of demand is an important factor in determining the ROP.

Accepted Answer

A) True 
 B)False

Question 19

In the EOQ formula, holding costs under 10% are expressed as percentages, above 10% are expressed as annual unit costs.

Accepted Answer

A) True 
 B)False

Question 20

Monitoring inventory turns over time can be used as a measure of performance.

Accepted Answer

A) True 
 B)False

Exam 13: Inventory Management

Interest, insurance, and opportunity costs are all associated with holding costs.

In the fixed-order interval model, the order size is the same for each order.

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

In the single-period model, the service level is the probability that demand will not exceed the stocking level in any period.

ROP models indicate to managers the time between orders.

If the order size was 1,000 kilograms of resin, what would be the average inventory level?

If he were to order 16 cases of Stein beer at a time, what would be the length of an order cycle?

A non-linear cost related to order size is the cost of:

For the economic order quantity, what is the reorder point?

When to order can be calculated by the ROP and expressed as a quantity.

A retail store that carries twice the inventory as its competitor will provide twice the customer service level.

For the economic order quantity, what is the average inventory level?

EOQ inventory models are basically concerned with the timing of orders.

Quantity discounts are generally given for large number of orders.

In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent.

Given the following information: Order quantity = 300;

The rate of demand is an important factor in determining the ROP.

In the EOQ formula, holding costs under 10% are expressed as percentages, above 10% are expressed as annual unit costs.

Monitoring inventory turns over time can be used as a measure of performance.

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