Exam 16: Inventory Management

Given an EOQ model with shortages in which annual demand is 4200 units, C_o=$160, C_c=$7 per unit per year and C_s=$25, what is the optimal stock out level?

When viewing a plot of inventory level against time, the distance on the time axis from when an order has been placed to when it is received is ________.

The manager of the Quick Stop Corner convenience store (which is open 360 days per year) sells four cases of Stein soda each day (1440 cases per year). Order costs are $8.00 per order. The lead time for an order is three days. Annual holding costs are equal to $57.60 per case. -If the daily demand is 10 and the lead time in days is 8, what is the reorder point?

The purpose of inventory management is to determine ________ and ________ to order.

The manager of the Quick Stop Corner convenience store (which is open 360 days per year) sells four cases of Stein soda each day (1440 cases per year). Order costs are $8.00 per order. The lead time for an order is three days. Annual holding costs are equal to $57.60 per case. -If the daily demand is 50 and the lead time in days is 4, what is the reorder point?

The service level is the probability that

________ is the optimal order quantity that will minimize the total inventory costs.

Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags). It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year. -What is the reorder point for Kushie's if they reorder a quantity twice as high as their EOQ?

The daily sales of a peanut butter at Power's Grocery are normally distributed, with a mean of 12 jars and a standard deviation of 4. The manager checks the inventories on shelves and places an order every three days. Delivery lead time is two days. -The daily demand for a product is normally distributed with a mean of 80 and a standard deviation of 8. Constant lead time is 4 days. The cost of placing an order is $20. The item costs $8 and the carrying rate per year is 10% of the item cost. Determine the economic order quantity for a 365-day year.

The basic EOQ model plays no role in determining order sizes in the presence of quantity discounts.

Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags). It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year. -How many orders per year does Kushie's place if they order a cost minimizing quantity?

In a(n) ________ inventory system, an order is placed for a variable amount after a fixed passage of time.

In the basic EOQ model, the amount ordered is received in ________ shipment(s).

________ demand items are used internally to produce a final product.

Kushie's Coffee in Bangalore is a quaint establishment nestled near MG Road in the central business district. It serves coffee and fruit cake to a clientele that has been enjoying these products for over fifty years. The demand for coffee beans is 6600 cases per year (each case has 24 ten-pound bags). It would be disastrous for them to run out of coffee, so they keep a safety stock of 30 cases. The cases cost $4800 and it costs $5 per case to order coffee. As coffee is a perishable product, the holding cost is fairly high at $40/case/year. The lead time to receive an order is seven days. Kushie's is open 300 days a year. -What is the increase in their EOQ if all of the model parameters (except the number of days in a year) double?

Service level is positively correlated with the size of the buffer stock.

If annual demand equals 1000 units, the number of working days per year is 250, C_o=$300 per order and C_c=$3 per unit, how many days are between orders in the basic EOQ model?

In the basic EOQ model, as the size of the order increases, the annual ________ cost decreases.

The service level is the probability that the inventory available during the lead time will meet the demand.

Inventory costs include