Question 1

Buffer inventories provide independence between different stages of the production process.

Accepted Answer

A) True 
 B)False  True

Question 2

With the economic order quantity (EOQ)model,increasing the order quantity reduces inventory carrying cost.

Accepted Answer

A) True 
 B)False  False

Question 3

The demand for an electronic component is normally distributed with an average daily demand of 500 units and a standard deviation of 50.The lead time for the component is 9 days.If a service level of 95% is desired,then the company's safety stock for this component is approximately

Accepted Answer

A) 150 units. 
B) 247 units. 
C) 336 units. 
D) 740 units. 
A) 150 units. 
B) 247 units. 
C) 336 units. 
D) 740 units. B

Question 4

Which of the following is not considered a form of inventory?

Accepted Answer

A) items being transported 
B) tools and equipment 
C) purchased parts and supplies 
D) backorders 
A) items being transported 
B) tools and equipment 
C) purchased parts and supplies 
D) backorders

Question 5

Which of the following is not an example of inventory carried to satisfy independent demand?

Accepted Answer

A) spare parts 
B) finished product 
C) raw materials 
D) All the answer choices are correct. 
A) spare parts 
B) finished product 
C) raw materials 
D) All the answer choices are correct.

Question 6

________________ is additional inventory kept on hand to meet variations in product demand.

Accepted Answer

A) Safety stock 
B) Buffer stock 
C) Finished stock 
D) None of these answer choices is correct. 
A) Safety stock 
B) Buffer stock 
C) Finished stock 
D) None of these answer choices is correct.

Question 7

List and discuss the costs used to determine carrying cost,holding cost and shortage cost.

Accepted Answer

-facility storage (rent,depreciation,uti

Question 8

In general,as the order size increases

Accepted Answer

A) ordering costs decrease and carrying costs increase. 
B) ordering costs increase and carrying costs decrease. 
C) both ordering and carrying costs increase. 
D) both ordering and carrying costs decrease. 
A) ordering costs decrease and carrying costs increase. 
B) ordering costs increase and carrying costs decrease. 
C) both ordering and carrying costs increase. 
D) both ordering and carrying costs decrease.

Question 9

The production quantity model,a variation of the basic EOQ model,assumes non-instantaneous replenishment.

Accepted Answer

A) True 
 B)False

Question 10

The conventional approach to inventory management is to maintain a level of inventory that reflects a compromise between inventory cost and customer service.

Accepted Answer

A) True 
 B)False

Question 11

From a supplier perspective,the purpose of a quantity discount is to get the customer to buy

Accepted Answer

A) more than the economic order quantity. 
B) less than the economic order quantity. 
C) the economic order quantity. 
D) None of these answer choices is correct. 
A) more than the economic order quantity. 
B) less than the economic order quantity. 
C) the economic order quantity. 
D) None of these answer choices is correct.

Question 12

With the quantity discount model,the first price point examined is the one associated with the EOQ quantity calculated using the basic model.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not an assumption of the EOQ model?

Accepted Answer

A) demand is known and constant 
B) no shortages allowed 
C) lead time is determined by quantity ordered 
D) order quantity is received all at once 
A) demand is known and constant 
B) no shortages allowed 
C) lead time is determined by quantity ordered 
D) order quantity is received all at once

Question 14

For a given annual demand,total annual ordering cost is independent of order size.

Accepted Answer

A) True 
 B)False

Question 15

For a quantity discount problem,the order quantity selected is the one that minimizes the total annual _________ cost.

Accepted Answer

A) inventory 
B) carrying 
C) ordering 
D) purchase 
A) inventory 
B) carrying 
C) ordering 
D) purchase

Question 16

Briefly compare and contrast a continuous inventory system to a periodic inventory system listing the advantages and disadvantages of each.

Accepted Answer

There are two basic types of inventory s

Question 17

Inventory costs _________________ when higher levels of inventory are needed to improve customer service.

Accepted Answer

A) decrease 
B) stay the same 
C) increase 
D) cannot be estimated 
A) decrease 
B) stay the same 
C) increase 
D) cannot be estimated

Question 18

Finished product is an example of a dependent demand item.

Accepted Answer

A) True 
 B)False

Question 19

A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate.If the cost to order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00,then the economic order quantity for napkins is

Accepted Answer

A) 62,500 boxes. 
B) 10,000 boxes. 
C) 5,000 boxes. 
D) 2,500 boxes. 
A) 62,500 boxes. 
B) 10,000 boxes. 
C) 5,000 boxes. 
D) 2,500 boxes.

Question 20

The economic order quantity occurs when the annual carrying cost is equal to the annual ordering cost.

Accepted Answer

A) True 
 B)False

Exam 18: Inventory Management

Buffer inventories provide independence between different stages of the production process.

With the economic order quantity (EOQ)model,increasing the order quantity reduces inventory carrying cost.

The demand for an electronic component is normally distributed with an average daily demand of 500 units and a standard deviation of 50.The lead time for the component is 9 days.If a service level of 95% is desired,then the company's safety stock for this component is approximately

Which of the following is not considered a form of inventory?

Which of the following is not an example of inventory carried to satisfy independent demand?

________________ is additional inventory kept on hand to meet variations in product demand.

List and discuss the costs used to determine carrying cost,holding cost and shortage cost.

In general,as the order size increases

The production quantity model,a variation of the basic EOQ model,assumes non-instantaneous replenishment.

The conventional approach to inventory management is to maintain a level of inventory that reflects a compromise between inventory cost and customer service.

From a supplier perspective,the purpose of a quantity discount is to get the customer to buy

With the quantity discount model,the first price point examined is the one associated with the EOQ quantity calculated using the basic model.

Which of the following is not an assumption of the EOQ model?

For a given annual demand,total annual ordering cost is independent of order size.

For a quantity discount problem,the order quantity selected is the one that minimizes the total annual _________ cost.

Briefly compare and contrast a continuous inventory system to a periodic inventory system listing the advantages and disadvantages of each.

Inventory costs _________________ when higher levels of inventory are needed to improve customer service.

Finished product is an example of a dependent demand item.

A restaurant currently uses 62,500 boxes of napkins each year at a constant daily rate.If the cost to order napkins is $200.00 per order and the annual carrying cost for one box of napkins is $1.00,then the economic order quantity for napkins is

The economic order quantity occurs when the annual carrying cost is equal to the annual ordering cost.

Introduction to Operations and Supply Chain Management

Supplement Operational Decision-Making Tools: Decision Analysis

Quality Management

Statistical Process Control

Supplement Operational Decision-Making Tools: Acceptance Sampling

Product Design

Service Design

Processes and Technology

Capacity and Facilities

Supplement Operational Decision-Making Tools: Facility Location Models

Human Resources

Supplement Operational Decision-Making Tools: Work Measurement

Project Management

Supply Chain Management Strategy and Design

Global Supply Chain Procurement and Distribution

Supplement Operational Decision-Making Tools: Transportation and Transshipment Models

Forecasting

Supplement Operational Decision-Making Tools: Simulation

Sales and Operations Planning

Supplement Operational Decision-Making Tools: Linear Programming

Enterprise Resource Planning

Lean Systems

Scheduling

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