Exam 7: Inventory Management

Which one of the following statements regarding the economic order quantity is true?

The ABC inventory control system categorizes inventory items into three groups,A,B,and C.A items are given highest priority,while C items have the lowest priority.Prioritization may be based on annual dollar usage,shelf life,or sales volume.

Which of the following is a disadvantage of excessive inventory?

The ABC inventory matrix shows an ABC inventory classification based on annual usage on the vertical axis and an ABC inventory classification based on physical inventory on the horizontal axis.

The (s,S)continuous review inventory system orders the same quantity Q when physical inventory reaches the reorder points.

Which of the following is not an assumption of the economic order quantity model?

Describe the ABC inventory matrix,and how is it used to manage inventory.

The EOQ,also known as the economic order quantity,is the order size where annual inventory holding costs equal annual ordering costs.

Briefly describe the differences between dependent and independent demand.Provide examples of dependent and independent demand items for each of the following industries: automotive industry,personal computer industry,bicycle industry

Dependent Demand must be forecasted based on market conditions.

Which of the following would most likely be considered a dependent demand item?

If an item is ordered at its economic order quantity,the annual carrying cost should be:

The term Cycle Counting is synonymous with physically counting inventory.

Use the graph below to answer the questions that follow. a.Identify the Annual Holding Cost curve. Provide a brief description of what the Annual Holding Cost curve represents. b.Identify the Annual Ordering Cost curve. Provide a brief description of what the Annual Ordering Cost curve represents. c.Identify the Annual Total Cost Curve. Provide a brief description of what the Annual Total Cost curve represents. d.Identify the Economic Order Quantity. Provide a brief description of what the Economic Order Quantity represents.

The optimal order quantity for the quantity discount model may exist at a price breakpoint.

What is Radio Frequency Identification (RFID)? Provide four examples or scenarios of how RFID can be used to aid in supply chain management.

Which of the following is a global RFID challenge?

Classify the following inventory items as either A,B,or C items according to the ABC analysis method:? Item \# Annual Sales Unit Cost Current Inventory Value \ Classification 1 130 units \ 4.00 2 400 units 15.30 3 25 units 17.00 4 1320 units 1.25 5 90 units 2.10

The total annual inventory cost is the sum of the annual purchase cost,the annual holding cost,the annual capacity cost,and the annual ordering cost.

The periodic inventory review system reviews physical inventory at specific points in time.