Question 1

________ is the planning and controlling of inventories in order to meet the competitive priorities of the organization.

Accepted Answer

Inventory

Question 2

Scenario 9.2
Shipments of Product X from a plant to a wholesaler are made in lots of 600.The wholesaler's average demand for X is 100 units per week.The lead time from the plant to the wholesaler is 4 weeks.The wholesaler pays for the shipments when they leave the plant.
-Refer to Scenario 9.2.Which of the following situations results in the wholesaler's total cycle plus pipeline inventories amounting to 550 units?

Accepted Answer

A) The plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks 
B) The plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks 
C) The plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks 
D) The plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks 
A) The plant shipment lot size of 400 and plant-to-wholesaler lead time of 2 weeks 
B) The plant shipment lot size of 500 and plant-to-wholesaler lead time of 3 weeks 
C) The plant shipment lot size of 400 and plant-to-wholesaler lead time of 3 weeks 
D) The plant shipment lot size of 600 and plant-to-wholesaler lead time of 4 weeks

Question 3

What are the secondary levers for pipeline inventory?

Accepted Answer

The secondary levers for pipeline invent

Question 4

If an item is ordered using an EOQ policy,as the annual demand for an item decreases,the EOQ for the item ________.

Accepted Answer

The answer of If an item is ordered using an...

Question 5

What is generally TRUE about class A SKUs in ABC analysis? They represent about:

Accepted Answer

A) 50 percent of all SKUs. 
B) 80 percent of all SKUs. 
C) 20 percent of the dollar usage. 
D) 80 percent of the dollar usage. 
A) 50 percent of all SKUs. 
B) 80 percent of all SKUs. 
C) 20 percent of the dollar usage. 
D) 80 percent of the dollar usage.

Question 6

What are the three types of inventory? For which inventory type is a stockout most critical?

Accepted Answer

The types of inventory discuss

Question 7

ABC analysis is closely related to:

Accepted Answer

A) three-bin analysis. 
B) EOQ analysis. 
C) repeatability analysis. 
D) Pareto analysis. 
A) three-bin analysis. 
B) EOQ analysis. 
C) repeatability analysis. 
D) Pareto analysis.

Question 8

If on-hand inventory = 100 units,scheduled receipts = 100 units and backorders = 100 units,the Inventory Position (IP)is the sum of the three,or 300 units.

Accepted Answer

A) True 
 B)False

Question 9

A store has collected the following information on one of its products:
Demand = 5,000 units/year
Ordering costs = $12/order
Holding costs = $4/unit/year
Lead-time = 5 days weeks
Unit cost = $748/unit
Number of weeks per year = 50 weeks
a.The firm currently orders 500 units per order.What is the total cost of ordering and holding these goods under this system?
b.Determine their economic order quantity and cost of ordering and holding goods using the EOQ.
c.Form the ratio of the order quantities under the old policy and EOQ.Form the ratio of the EOQ to the old order quantity.Then form the ratio of their total system costs under the two ordering policies.Average these two ratios and compare this number with the ratio of the old total cost with the total cost under an EOQ policy.
d.How do they compare?

Accepted Answer

a.
Holding cost at Q = 500: @#IMG-DLM& H = @#IMG-DLM& 4 = $1

Question 10

Scenario 9.5
Tom Bergman,owner and operator of the Earplug Superstore,is reviewing the costs associated with the store's best-selling hearing aid,the BZ15.The data available to Dr.Bergman concerning this device follow.
Demand = 25 units/week
Order cost = $3/order
Holding cost = $1.50/unit/year
The Earplug Superstore operates 52 weeks a year.
-Use the information in Scenario 9.5.If Tom orders at the economic order quantity,how many units does he order at a time?

Accepted Answer

A) less than or equal to 75 units 
B) greater than 75 but less than or equal to 150 units 
C) greater than 150 but less than or equal to 250 units 
D) greater than 250 units 
A) less than or equal to 75 units 
B) greater than 75 but less than or equal to 150 units 
C) greater than 150 but less than or equal to 250 units 
D) greater than 250 units

Question 11

EOQ should be used if you follow a make-to-stock strategy and the item has relatively stable demand.

Accepted Answer

A) True 
 B)False

Question 12

When considering reorder points and inventory position,if an item has an inventory position of 200 units,an order will be placed only if the reorder point is ________.

Accepted Answer

less than

Question 13

In ABC analysis,________ SKUs represent the smallest number of SKUs but the greatest dollar usage.

Accepted Answer

The answer of In ABC analysis,________ SKUs represent the smallest...

Question 14

Which of these statements about pipeline inventory is BEST?

Accepted Answer

A) Shorter lead times create more pipeline inventory. 
B) Changing an item's lot size does not directly affect the average level of the pipeline inventory. 
C) Pipeline inventory exists to avoid customer service problems. 
D) Pipeline inventory is used to even out volatile fluctuations in supply or demand. 
A) Shorter lead times create more pipeline inventory. 
B) Changing an item's lot size does not directly affect the average level of the pipeline inventory. 
C) Pipeline inventory exists to avoid customer service problems. 
D) Pipeline inventory is used to even out volatile fluctuations in supply or demand.

Question 15

Scenario 9.12
Demand = 100,000 units/year
Number of days per year = 250 weeks
Standard deviation of weekly demand = 50 units
Average lead time = 5 days
Standard deviation of lead time: 2 days
Cycle-service level = 99%
A continuous review system is used to control inventory.
A normal distribution table is appended to this exam.
-Use the information in Scenario 9.12.What is the standard deviation of demand during lead time?

Accepted Answer

A) greater than 0 but less than or equal to 500 units 
B) greater than 500 units but less than or equal to 1,500 units 
C) greater than 1,500 units but less than or equal to 2,500 units 
D) greater than 2,500 units 
A) greater than 0 but less than or equal to 500 units 
B) greater than 500 units but less than or equal to 1,500 units 
C) greater than 1,500 units but less than or equal to 2,500 units 
D) greater than 2,500 units

Question 16

Which of the following generates pressure to increase inventories?

Accepted Answer

A) inventory holding costs 
B) ordering costs 
C) storage and handling costs 
D) taxes and insurance 
A) inventory holding costs 
B) ordering costs 
C) storage and handling costs 
D) taxes and insurance

Question 17

The scheduled receipts are orders that have been placed but not yet received.

Accepted Answer

A) True 
 B)False

Question 18

What is generally TRUE about class C SKUs in ABC analysis? They represent about:

Accepted Answer

A) 20 percent of all SKUs. 
B) 50 percent of all SKUs. 
C) 15 percent of the dollar usage. 
D) 50 percent of the dollar usage. 
A) 20 percent of all SKUs. 
B) 50 percent of all SKUs. 
C) 15 percent of the dollar usage. 
D) 50 percent of the dollar usage.

Question 19

Apply your understanding of forecasting to the idea of developing a reorder point for uncertain demand.What could be done to make a reorder point more accurate?

Accepted Answer

The reorder point is determined by the a

Question 20

Which one of the following statements represents an advantage of a Q system over the P system?

Accepted Answer

A) A perpetual inventory system is not mandatory. 
B) Orders for multiple items from the same supplier can be combined more easily. 
C) Fixed replenishment intervals are possible,which can be,administratively,quite convenient. 
D) The Q system is more suited for quantity discounts and physical limitations. 
A) A perpetual inventory system is not mandatory. 
B) Orders for multiple items from the same supplier can be combined more easily. 
C) Fixed replenishment intervals are possible,which can be,administratively,quite convenient. 
D) The Q system is more suited for quantity discounts and physical limitations.

Exam 9: Inventory Management

________ is the planning and controlling of inventories in order to meet the competitive priorities of the organization.

What are the secondary levers for pipeline inventory?

If an item is ordered using an EOQ policy,as the annual demand for an item decreases,the EOQ for the item ________.

What is generally TRUE about class A SKUs in ABC analysis? They represent about:

What are the three types of inventory? For which inventory type is a stockout most critical?

ABC analysis is closely related to:

If on-hand inventory = 100 units,scheduled receipts = 100 units and backorders = 100 units,the Inventory Position (IP)is the sum of the three,or 300 units.

EOQ should be used if you follow a make-to-stock strategy and the item has relatively stable demand.

When considering reorder points and inventory position,if an item has an inventory position of 200 units,an order will be placed only if the reorder point is ________.

In ABC analysis,________ SKUs represent the smallest number of SKUs but the greatest dollar usage.

Which of these statements about pipeline inventory is BEST?

Which of the following generates pressure to increase inventories?

The scheduled receipts are orders that have been placed but not yet received.

What is generally TRUE about class C SKUs in ABC analysis? They represent about:

Apply your understanding of forecasting to the idea of developing a reorder point for uncertain demand.What could be done to make a reorder point more accurate?

Which one of the following statements represents an advantage of a Q system over the P system?

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