Question 1

A one-bin system of inventory involves periodic replenishment no matter how few inventory items are needed.

Accepted Answer

A) True 
 B)False

Question 2

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Fixed-order quantity inventory systems determine the order point,R and the order quantity,Q values.

Accepted Answer

A) True 
 B)False

Question 5

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand,which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?

Accepted Answer

A) 1.28 
B) 1.64 
C) 1.96 
D) 2.00 
E) 2.18 
A) 1.28 
B) 1.64 
C) 1.96 
D) 2.00 
E) 2.18

Question 6

Using the fixed-time period inventory model and given an average daily demand of 15 units,3 days between inventory reviews,1 day for lead time,30 units of inventory on hand,a service probability of 98 percent and a standard deviation of daily demand is 3 units,which of the following is the order quantity?

Accepted Answer

A) About 30.4 
B) About 42.3 
C) About 53.7 
D) About 56.8 
E) About 59.8 
A) About 30.4 
B) About 42.3 
C) About 53.7 
D) About 56.8 
E) About 59.8

Question 7

The standard fixed-time period model assumes that inventory is never counted but determined by EOQ measures.

Accepted Answer

A) True 
 B)False

Question 8

In a one-bin inventory system the inventory Level is brought up to its predetermined maximum at a fixed time period (such as weekly).

Accepted Answer

A) True 
 B)False

Question 9

Assuming no safety stock,what is the re-order point (R)given an average daily demand of 50 units,a lead time of 10 days and 625 units on hand?

Accepted Answer

A) 550 
B) 500 
C) 715 
D) 450 
E) 475 
A) 550 
B) 500 
C) 715 
D) 450 
E) 475

Question 10

In order to determine the standard deviation of usage during lead time in the reorder point formula for a fixed-order quantity inventory model which of the following must be computed first?

Accepted Answer

A) Standard deviation of daily demand 
B) Number of standard deviations for a specific service probability 
C) Stockout cost 
D) Economic order quantity 
E) Safety stock Level 
A) Standard deviation of daily demand 
B) Number of standard deviations for a specific service probability 
C) Stockout cost 
D) Economic order quantity 
E) Safety stock Level

Question 11

If it takes a supplier 25 days to deliver an order once it has been placed and the standard deviation of daily demand is 20,which of the following is the standard deviation of usage during lead time?

Accepted Answer

A) 50 
B) 100 
C) 400 
D) 1,000 
E) 1,600 
A) 50 
B) 100 
C) 400 
D) 1,000 
E) 1,600

Question 12

Using the fixed-order quantity model,what is the total ordering cost of inventory given an annual demand of 36,000 units,a cost per order of $40 and a holding cost per unit per year of $45?

Accepted Answer

The answer of Using the fixed-order quantity model,what is the...

Question 13

The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Accepted Answer

A) Ordering or setup costs are constant 
B) Inventory holding cost is based on average inventory 
C) Diminishing returns to scale of holding inventory 
D) Lead time is constant 
E) Demand for the product is uniform throughout the period 
A) Ordering or setup costs are constant 
B) Inventory holding cost is based on average inventory 
C) Diminishing returns to scale of holding inventory 
D) Lead time is constant 
E) Demand for the product is uniform throughout the period

Question 15

The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

Accepted Answer

A) True 
 B)False

Question 16

If annual demand is 35,000 units,the ordering cost is $50 per order and the holding cost is $0.65 per unit per year,which of the following is the optimal order quantity using the fixed-order quantity model?

Accepted Answer

A) 5,060 
B) 2,320 
C) 2,133 
D) 2,004 
E) 1,866 
A) 5,060 
B) 2,320 
C) 2,133 
D) 2,004 
E) 1,866

Question 17

If it takes a supplier 10 days to deliver an order once it has been placed and the standard deviation of daily demand is 14,what is the standard deviation of usage during lead time?

Accepted Answer

The answer of If it takes a supplier 10 days...

Question 18

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

Accepted Answer

A) Economic Order Inventory 
B) Work-in-process 
C) Quality units 
D) JIT Inventory 
E) Re-order point 
A) Economic Order Inventory 
B) Work-in-process 
C) Quality units 
D) JIT Inventory 
E) Re-order point

Question 19

Which of the following is not one of the categories of manufacturing inventory?

Accepted Answer

A) Raw materials 
B) Finished products 
C) Component parts 
D) Just-in-time 
E) Supplies 
A) Raw materials 
B) Finished products 
C) Component parts 
D) Just-in-time 
E) Supplies

Question 20

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 daily demand.

Accepted Answer

A) True 
 B)False

Exam 17: Inventory Control

A one-bin system of inventory involves periodic replenishment no matter how few inventory items are needed.

Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis rather than once or twice a year.

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

Fixed-order quantity inventory systems determine the order point,R and the order quantity,Q values.

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand,which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?

The standard fixed-time period model assumes that inventory is never counted but determined by EOQ measures.

In a one-bin inventory system the inventory Level is brought up to its predetermined maximum at a fixed time period (such as weekly).

Assuming no safety stock,what is the re-order point (R)given an average daily demand of 50 units,a lead time of 10 days and 625 units on hand?

In order to determine the standard deviation of usage during lead time in the reorder point formula for a fixed-order quantity inventory model which of the following must be computed first?

If it takes a supplier 25 days to deliver an order once it has been placed and the standard deviation of daily demand is 20,which of the following is the standard deviation of usage during lead time?

Using the fixed-order quantity model,what is the total ordering cost of inventory given an annual demand of 36,000 units,a cost per order of $40 and a holding cost per unit per year of $45?

The fixed-order quantity inventory model requires more time to maintain because every addition or withdrawal is logged.

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

The fixed-time period inventory system has a smaller average inventory than the fixed-order quantity system because it must also protect against stockouts during the review period when inventory is checked.

If annual demand is 35,000 units,the ordering cost is $50 per order and the holding cost is $0.65 per unit per year,which of the following is the optimal order quantity using the fixed-order quantity model?

If it takes a supplier 10 days to deliver an order once it has been placed and the standard deviation of daily demand is 14,what is the standard deviation of usage during lead time?

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

Which of the following is not one of the categories of manufacturing inventory?

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 daily demand.

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

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Job Design Work Measurement

Waiting Line Analysis

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