Question 1

What is "inventory accuracy",why is it important and how does inaccuracy occur?

Accepted Answer

Inventory accuracy is discussed on page

Question 2

Which of the following is the symbol for the cost of placing an order in the fixed-order quantity inventory model?

Accepted Answer

A) C 
B) TC 
C) H 
D) Q 
E) S 
A) C 
B) TC 
C) H 
D) Q 
E) S

Question 3

Safety stock can be computed when using the fixed-order quantity inventory model by multiplying a "z" value representing the number of standard deviations to achieve a service Level or probability by the standard deviation of lead time.

Accepted Answer

A) True 
 B)False

Question 4

The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory and then subtracting back-ordered inventory.

Accepted Answer

A) True 
 B)False

Question 5

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

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Safety stock is not necessary in any fixed-time period system.

Accepted Answer

A) True 
 B)False

Question 8

A company wants to determine its reorder point (R).Demand is variable and they want to build a safety stock into R.The company wants to have a service probability coverage of 95 percent.If average daily demand is 8,lead time is 3 days and the standard deviation of usage during lead time is 2,which of the following is the desired value of R?

Accepted Answer

A) About 17.9 
B) About 19.7 
C) About 24.0 
D) About 27.3 
E) About 31.2 
A) About 17.9 
B) About 19.7 
C) About 24.0 
D) About 27.3 
E) About 31.2

Question 9

When stocked items are sold,the optimal inventory decision using marginal analysis is to stock that quantity where profit from the sale or use of the last unit is equal to or greater than the losses if the last unit remains unsold.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) Periodic system model 
B) The two bin system 
C) Q model 
D) EOQ Formula 
E) Just-in-time model 
A) Periodic system model 
B) The two bin system 
C) Q model 
D) EOQ Formula 
E) Just-in-time model

Question 11

Assume that annual demand for a part is 15,000 units,the ordering cost is $20 per order and the annual holding cost of carrying inventory in stock is 50% of the cost of the unit.A quantity discount will reduce the unit price from $5.00 for an order placed between 0 to 1,499 units to $4.95 for an order of the size of 1,500 units or more.Using a price-break inventory model,which of the following is the optimal order quantity?

Accepted Answer

A) 357 units 
B) 490 units 
C) 1,500 units 
D) 1,992 units 
E) None of the above 
A) 357 units 
B) 490 units 
C) 1,500 units 
D) 1,992 units 
E) None of the above

Question 12

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 13

A company has recorded the last six days of daily demand on a single product they sell.Those values are 37,115,93,112,73 and 110.The time from when an order is placed to when it arrives at the company from its vendor is 3 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)?

Accepted Answer

A) 540 
B) 270 
C) 115 
D) 90 
E) 60 
A) 540 
B) 270 
C) 115 
D) 90 
E) 60

Question 14

What are the five purposes of inventory?

Accepted Answer

1.To maintain independence of operations

Question 15

A company has recorded the last five days of daily demand on their 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)?

Accepted Answer

A) 120 
B) 126 
C) 630 
D) 950 
E) 1,200 
A) 120 
B) 126 
C) 630 
D) 950 
E) 1,200

Question 16

In a department store's inventory management system a stockkeeping unit (SKU)can be used to do which of the following?

Accepted Answer

A) To identify each item 
B) To discover quality issues before an item is sold 
C) To identify who purchased exactly which unit 
D) To track shoplifters 
E) To keep clerks active even when there are few customers in the store 
A) To identify each item 
B) To discover quality issues before an item is sold 
C) To identify who purchased exactly which unit 
D) To track shoplifters 
E) To keep clerks active even when there are few customers in the store

Question 17

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

Accepted Answer

The text distinguishes between dependent

Question 18

If annual demand is 8,000 units,the ordering cost is $20 per order and the holding cost is $12.50 per unit per year,what is the optimal order quantity using the fixed-order quantity inventory model?

Accepted Answer

The answer of If annual demand is 8,000 units,the ordering...

Question 19

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 20

What is the term for there being no relationship between demands for various items?

Accepted Answer

The answer of What is the term for there being...

Exam 17: Inventory Control

What is "inventory accuracy",why is it important and how does inaccuracy occur?

Which of the following is the symbol for the cost of placing an order in the fixed-order quantity inventory model?

Safety stock can be computed when using the fixed-order quantity inventory model by multiplying a "z" value representing the number of standard deviations to achieve a service Level or probability by the standard deviation of lead time.

The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory and then subtracting back-ordered inventory.

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

Safety stock is not necessary in any fixed-time period system.

When stocked items are sold,the optimal inventory decision using marginal analysis is to stock that quantity where profit from the sale or use of the last unit is equal to or greater than the losses if the last unit remains unsold.

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

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

What are the five purposes of inventory?

In a department store's inventory management system a stockkeeping unit (SKU)can be used to do which of the following?

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

If annual demand is 8,000 units,the ordering cost is $20 per order and the holding cost is $12.50 per unit per year,what is the optimal order quantity using the fixed-order quantity inventory model?

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

What is the term for there being no relationship between demands for various items?

Introduction to the Field

Operations and Supply Strategy

Project Management

Product and Service Design

Strategic Capacity Management

Process Analysis

Manufacturing Processes

Service Processes

Six Sigma Quality

Supply-Chain Strategy

Logistics and Facility Location

Lean Manufacturing

Operations Consulting Reengineering

Enterprise Resource Planning Systems

Demand Management and Forecasting

Aggregate Sales and Operations Planning

Material Requirements Planning

Scheduling

Constraint Management

Linear Programming Using the Excel Solver

Learning Curves

Job Design Work Measurement

Waiting Line Analysis

Process Capability and Spc

Simulation

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