Question 1

In manufacturing,which of the following is not considered a type of inventory?

Accepted Answer

A) Raw materials 
B) WIP 
C) Finished goods 
D) Transport items 
E) Supplies 
A) Raw materials 
B) WIP 
C) Finished goods 
D) Transport items 
E) Supplies D

Question 2

Three common technologies that companies employ for managing inventory are ERP,EDI,and RFID.

Accepted Answer

A) True 
 B)False  True

Question 3

A direct result of increasing safety stock is generally improved customer service and a reduction in stockouts.

Accepted Answer

A) True 
 B)False  True

Question 4

WIP is necessary in most manufacturing,service,and supply chain contexts to allow for fluctuations in demand and variations in production time.

Accepted Answer

A) True 
 B)False

Question 5

Pipeline inventory consists of orders that have been placed but not yet received.

Accepted Answer

A) True 
 B)False

Question 6

What items are often kept in inventory for a service company?

Accepted Answer

A) MRO 
B) RFID 
C) EOQ 
D) QFD 
E) ROP 
A) MRO 
B) RFID 
C) EOQ 
D) QFD 
E) ROP

Question 7

The main difference between a continuous review system and a periodic review system is that a periodic system always orders the same quantity of items.

Accepted Answer

A) True 
 B)False

Question 8

Quantity discounts are offered to take advantages of the economies of scale.

Accepted Answer

A) True 
 B)False

Question 9

Purchased items like books,food,cars,TVs,or computers are generally considered to have independent demand.

Accepted Answer

A) True 
 B)False

Question 10

Briefly describe the "Wal-Mart Effect."

Accepted Answer

The "Wal-Mart Effect" describes the trem

Question 11

Services need to inventory supplies that are necessary to keep the business running.

Accepted Answer

A) True 
 B)False

Question 12

For cycle inventory,the maximum amount is on hand at the beginning of the order cycle.

Accepted Answer

A) True 
 B)False

Question 13

The total annual inventory cost will be minimized when the holding cost is equal to what?

Accepted Answer

A) The EOQ amount 
B) The ordering cost 
C) The safety stock 
D) The annual demand 
E) The inventory position cost 
A) The EOQ amount 
B) The ordering cost 
C) The safety stock 
D) The annual demand 
E) The inventory position cost

Question 14

Why would a company offer discounted pricing for items that they sell?

Accepted Answer

A) To take advantage of economies of scale 
B) To minimize the shipping quantity 
C) To discourage large orders 
D) To maximize setup time 
E) All of these options are reasons for discounting price 
A) To take advantage of economies of scale 
B) To minimize the shipping quantity 
C) To discourage large orders 
D) To maximize setup time 
E) All of these options are reasons for discounting price

Question 15

An inventory review system that always orders the same quantity of items but may have differing periods of time between orders has what type of review system?

Accepted Answer

A) Aggregate 
B) Declining 
C) Accelerating 
D) Continuous 
E) Perpetual 
A) Aggregate 
B) Declining 
C) Accelerating 
D) Continuous 
E) Perpetual

Question 16

Which of the following is generally not a reason to reduce inventory?

Accepted Answer

A) To minimize interest paid on operating capital 
B) To minimize the cost of storage and handling 
C) To minimize property taxes and insurance premiums 
D) To increase customer service levels 
E) To minimize shrinkage and spoilage 
A) To minimize interest paid on operating capital 
B) To minimize the cost of storage and handling 
C) To minimize property taxes and insurance premiums 
D) To increase customer service levels 
E) To minimize shrinkage and spoilage

Question 17

The amount of inventory carried and the amount of taxes assessed on the inventory are often positively correlated.

Accepted Answer

A) True 
 B)False

Question 18

A components manufacturer uses approximately 20,000 units annually of an item.They are used at a steady rate during the 250 workdays that the plant operates.The price of each item is $7.00,and the annual carrying cost is $0.50 per unit per year.The ordering cost is $50.What is the time between orders?

Accepted Answer

TBO = D/Q

Question 19

A fixed-period inventory review system is also called

Accepted Answer

A) Aggregate 
B) Declining 
C) Accelerating 
D) Continuous 
E) Perpetual 
A) Aggregate 
B) Declining 
C) Accelerating 
D) Continuous 
E) Perpetual

Question 20

The total annual inventory cost will be minimized when the lot size equals what amount?

Accepted Answer

A) Demand 
B) Holding cost 
C) Economic order quantity 
D) Ordering cost 
E) Minimum batch cost 
A) Demand 
B) Holding cost 
C) Economic order quantity 
D) Ordering cost 
E) Minimum batch cost

In manufacturing,which of the following is not considered a type of inventory?

Three common technologies that companies employ for managing inventory are ERP,EDI,and RFID.

A direct result of increasing safety stock is generally improved customer service and a reduction in stockouts.

WIP is necessary in most manufacturing,service,and supply chain contexts to allow for fluctuations in demand and variations in production time.

Pipeline inventory consists of orders that have been placed but not yet received.

What items are often kept in inventory for a service company?

The main difference between a continuous review system and a periodic review system is that a periodic system always orders the same quantity of items.

Quantity discounts are offered to take advantages of the economies of scale.

Purchased items like books,food,cars,TVs,or computers are generally considered to have independent demand.

Briefly describe the "Wal-Mart Effect."

Services need to inventory supplies that are necessary to keep the business running.

For cycle inventory,the maximum amount is on hand at the beginning of the order cycle.

The total annual inventory cost will be minimized when the holding cost is equal to what?

Why would a company offer discounted pricing for items that they sell?

An inventory review system that always orders the same quantity of items but may have differing periods of time between orders has what type of review system?

Which of the following is generally not a reason to reduce inventory?

The amount of inventory carried and the amount of taxes assessed on the inventory are often positively correlated.

A fixed-period inventory review system is also called

The total annual inventory cost will be minimized when the lot size equals what amount?

Operations and Supply Chain Strategy

Quality Management

New Product Development

Process Design and Analysis

Forecasting

Dependent Demand Inventory

Project Management

Optimization and Simulation Modeling

Capacity Planning

Quality Improvement Methods

Lean Enterprise

Technology and Integrated Supply Management

Global Supply Chain and Service Integration

Filters

Exam 6: Independent Demand Inventory

In manufacturing,which of the following is not considered a type of inventory?

Three common technologies that companies employ for managing inventory are ERP,EDI,and RFID.

A direct result of increasing safety stock is generally improved customer service and a reduction in stockouts.

WIP is necessary in most manufacturing,service,and supply chain contexts to allow for fluctuations in demand and variations in production time.

Pipeline inventory consists of orders that have been placed but not yet received.

What items are often kept in inventory for a service company?

The main difference between a continuous review system and a periodic review system is that a periodic system always orders the same quantity of items.

Quantity discounts are offered to take advantages of the economies of scale.

Purchased items like books,food,cars,TVs,or computers are generally considered to have independent demand.

Briefly describe the "Wal-Mart Effect."

Services need to inventory supplies that are necessary to keep the business running.

For cycle inventory,the maximum amount is on hand at the beginning of the order cycle.

The total annual inventory cost will be minimized when the holding cost is equal to what?

Why would a company offer discounted pricing for items that they sell?

An inventory review system that always orders the same quantity of items but may have differing periods of time between orders has what type of review system?

Which of the following is generally not a reason to reduce inventory?

The amount of inventory carried and the amount of taxes assessed on the inventory are often positively correlated.

A fixed-period inventory review system is also called

The total annual inventory cost will be minimized when the lot size equals what amount?

Operations and Supply Chain Strategy

Quality Management

New Product Development

Process Design and Analysis

Forecasting

Dependent Demand Inventory

Project Management

Optimization and Simulation Modeling

Capacity Planning

Quality Improvement Methods

Lean Enterprise

Technology and Integrated Supply Management

Global Supply Chain and Service Integration

Filters