Exam 11: Inventory Management

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?

Price-break models deal with the fact that the selling price of an item generally increases as the order size increases.

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

In a price break model of lot sizing,to find the lowest-cost order quantity,it is sometimes necessary to calculate the economic order quantity for each possible price.

Fixed-time period inventory models are "time triggered."

The fixed-order quantity inventory model is more appropriate for important items such as critical repair parts because there is closer monitoring and therefore quicker response to a potential stockout.

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

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

What are the five purposes of inventory? 1._______________________________ 2._______________________________ 3._______________________________ 4._______________________________ 5._______________________________

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

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

The key difference between a fixed-order quantity inventory model,where demand is known and one where demand is uncertain is in computing the reorder point.

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)?

Which of the following is the set of all cost components that make up the fixed-order quantity total annual cost (TC)function?

Which of the following is a perpetual system for inventory management?

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?

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

Using the probability approach we assume that the demand over a period of time is normally distributed.

One of the drivers of the direct-to-store (direct distribution)approach is the upstream migration of value-added logistics services.

To take into consideration demand uncertainty in reorder point (R)calculations,what do we add to the product of the average daily demand and lead time in days when calculating the value of R?