Question 1

When material is ordered from a vendor,which of the following is not a reason for delays in the order arriving on time?

Accepted Answer

A) Normal variation in shipping time 
B) A shortage of material at the vendor's plant causing backlogs 
C) An unexpected strike at the vendor's plant 
D) A lost order 
E) Redundant ordering systems 
A) Normal variation in shipping time 
B) A shortage of material at the vendor's plant causing backlogs 
C) An unexpected strike at the vendor's plant 
D) A lost order 
E) Redundant ordering systems

Question 2

If annual demand is 50,000 units,the ordering cost is $25 per order and the holding cost is $5 per unit per year,which of the following is the optimal order quantity using the fixed-order quantity model?

Accepted Answer

A) 909 
B) 707 
C) 634 
D) 500 
E) 141 
A) 909 
B) 707 
C) 634 
D) 500 
E) 141

Question 3

The Pareto principle is best applied to which of the following inventory systems?

Accepted Answer

A) EOQ 
B) Fixed-time period 
C) ABC classification 
D) Fixed-order quantity 
E) Optional replenishment system 
A) EOQ 
B) Fixed-time period 
C) ABC classification 
D) Fixed-order quantity 
E) Optional replenishment system

Question 4

A company wants to determine its reorder point (R).Demand is variable and they want to build a safety stock into R.If the average daily demand is 12,the lead time is 5 days,the desired "z" value is 1.96 and the standard deviation of usage during lead time is 3,which of the following is the desired value of R?

Accepted Answer

A) About 6 
B) About 16 
C) About 61 
D) About 66 
E) About 79 
A) About 6 
B) About 16 
C) About 61 
D) About 66 
E) About 79

Question 5

Which of the following is not included as an inventory holding cost?

Accepted Answer

A) Annualized cost of materials 
B) Handling 
C) Insurance 
D) Pilferage 
E) Storage facilities 
A) Annualized cost of materials 
B) Handling 
C) Insurance 
D) Pilferage 
E) Storage facilities

Question 6

Using the fixed-time period inventory model and given an average daily demand of 300 units,4 days between inventory reviews,5 days for lead time,1,200 units of inventory on hand,a "z" of 1.96 and a standard deviation of demand over the review and lead time of 12 units,what quantity should be ordered?

Accepted Answer

The answer of Using the fixed-time period inventory model and...

Question 7

Which of the following is not a reason to carry inventory?

Accepted Answer

A) To provide a safeguard for variation in raw material delivery time 
B) To take advantage of economic purchase-order size 
C) To maintain independence of operations 
D) To meet variation in product demand 
E) To keep the stock out of the hands of competitors 
A) To provide a safeguard for variation in raw material delivery time 
B) To take advantage of economic purchase-order size 
C) To maintain independence of operations 
D) To meet variation in product demand 
E) To keep the stock out of the hands of competitors

Question 8

Which of the following is usually included as an inventory holding cost?

Accepted Answer

A) Breakage 
B) Order placing 
C) Typing up an order 
D) Quantity discounts 
E) Annualized cost of materials 
A) Breakage 
B) Order placing 
C) Typing up an order 
D) Quantity discounts 
E) Annualized cost of materials

Question 9

Using the ABC classification system for inventory,which of the following is a true statement?

Accepted Answer

A) The "C" items are of moderate dollar value per unit 
B) You should allocate about 15 % of the dollar volume to "B" items 
C) The "A" items are of low dollar value per unit 
D) The "A" items are of high dollar value per unit 
E) Inexpensive and low usage items are classified as "C" no matter how critical 
A) The "C" items are of moderate dollar value per unit 
B) You should allocate about 15 % of the dollar volume to "B" items 
C) The "A" items are of low dollar value per unit 
D) The "A" items are of high dollar value per unit 
E) Inexpensive and low usage items are classified as "C" no matter how critical

Question 10

What are some of the possible benefits of decreasing inventory order cycle time?

Accepted Answer

The story of the Heineken beer company (

Question 11

Computer inventory systems are often programmed to produce a cycle count notice in which following case?

Accepted Answer

A) When the record shows a near maximum balance on hand 
B) When the record shows positive balance but a backorder was written 
C) When quality problems have been discovered with the item 
D) When the item has become obsolete 
E) When the item has been misplaced in the stockroom 
A) When the record shows a near maximum balance on hand 
B) When the record shows positive balance but a backorder was written 
C) When quality problems have been discovered with the item 
D) When the item has become obsolete 
E) When the item has been misplaced in the stockroom

Question 12

Dependent demand inventory Levels are usually managed by calculations using calculus-driven,cost-minimizing models.

Accepted Answer

A) True 
 B)False

Question 13

Fixed-order quantity systems assume a random depletion of inventory,with less than an immediate order when a reorder point is reached.

Accepted Answer

A) True 
 B)False

Question 14

Inventory is defined as the stock of any item or resource used in an organization.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) 10 
B) 20 
C) 40 
D) 100 
E) 400 
A) 10 
B) 20 
C) 40 
D) 100 
E) 400

Question 16

Firms keep supplies of inventory for which of the following reasons?

Accepted Answer

A) To maintain dependence of operations 
B) To provide a feeling of security for the workforce 
C) To meet variation in product demand 
D) To hedge against wage increases 
E) To protect against supplier design changes 
A) To maintain dependence of operations 
B) To provide a feeling of security for the workforce 
C) To meet variation in product demand 
D) To hedge against wage increases 
E) To protect against supplier design changes

Question 17

In making any decision that affects inventory size,which of the following costs do not need to be considered?

Accepted Answer

A) Holding costs 
B) Setup costs 
C) Ordering costs 
D) Fixed costs 
E) Shortage costs 
A) Holding costs 
B) Setup costs 
C) Ordering costs 
D) Fixed costs 
E) Shortage costs

Question 18

Assuming no safety stock,what is the re-order point (R)given an average daily demand of 78 units and a lead time of 3 days?

Accepted Answer

A) 421 
B) 234 
C) 78 
D) 26 
E) 312 
A) 421 
B) 234 
C) 78 
D) 26 
E) 312

Question 19

Assume that annual demand for a part is 40,000 units,the ordering cost is $5 per order and the annual holding cost of carrying inventory in stock is 10% of the cost of the unit.A quantity discount will reduce the unit price from $5.00 for an order placed between 0 to 2,499 units to $4.95 for an order of the size of 2,500 units or more.Using a price-break inventory model,which of the following is the optimal order quantity?

Accepted Answer

A) 894 units 
B) 899 units 
C) 2,499 units 
D) 2,500 units 
E) 2,709.4 units 
A) 894 units 
B) 899 units 
C) 2,499 units 
D) 2,500 units 
E) 2,709.4 units

Question 20

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Accepted Answer

A) True 
 B)False

Exam 17: Inventory Control

When material is ordered from a vendor,which of the following is not a reason for delays in the order arriving on time?

If annual demand is 50,000 units,the ordering cost is $25 per order and the holding cost is $5 per unit per year,which of the following is the optimal order quantity using the fixed-order quantity model?

The Pareto principle is best applied to which of the following inventory systems?

Which of the following is not included as an inventory holding cost?

Which of the following is not a reason to carry inventory?

Which of the following is usually included as an inventory holding cost?

Using the ABC classification system for inventory,which of the following is a true statement?

What are some of the possible benefits of decreasing inventory order cycle time?

Computer inventory systems are often programmed to produce a cycle count notice in which following case?

Dependent demand inventory Levels are usually managed by calculations using calculus-driven,cost-minimizing models.

Fixed-order quantity systems assume a random depletion of inventory,with less than an immediate order when a reorder point is reached.

Inventory is defined as the stock of any item or resource used in an organization.

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

Firms keep supplies of inventory for which of the following reasons?

In making any decision that affects inventory size,which of the following costs do not need to be considered?

Assuming no safety stock,what is the re-order point (R)given an average daily demand of 78 units and a lead time of 3 days?

Safety stock can be defined as the amount of inventory carried in addition to the expected 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

Learning Curves

Job Design Work Measurement

Waiting Line Analysis

Process Capability and Spc

Simulation

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