Question 1

The Pareto principle is best applied to which of the following inventory systems?

Accepted Answer

A)  EOQ
B)  Fixed-time period
C)  ABC classification
D)  Fixed-order quantity
E)  Optional replenishment systemF) A) and B)
G) C) and D)

Question 2

Assume that annual demand for a part is 40,000 units,the ordering cost is $5 per order and the annual holding cost of carrying inventory in stock is 10% of the cost of the unit.A quantity discount will reduce the unit price from $5.00 for an order placed between 0 to 2,499 units to $4.95 for an order of the size of 2,500 units or more.Using a price-break inventory model,which of the following is the optimal order quantity?

Accepted Answer

A)  894 units
B)  899 units
C)  2,499 units
D)  2,500 units
E)  2,709.4 unitsF) C) and D)
G) A) and B)

Question 3

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

Accepted Answer

A)  Annualized cost of materials
B)  Handling
C)  Insurance
D)  Pilferage
E)  Storage facilitiesF) B) and C)
G) C) and D)

Question 4

Firms keep supplies of inventory for which of the following reasons?

Accepted Answer

A)  To maintain dependence of operations
B)  To provide a feeling of security for the workforce
C)  To meet variation in product demand
D)  To hedge against wage increases
E)  To protect against supplier design changesF) None of the above
G) A) and E)

Question 5

Assuming no safety stock,what is the re-order point (R) given an average daily demand of 78 units and a lead time of 3 days?

Accepted Answer

A)  421
B)  234
C)  78
D)  26
E)  312F) B) and D)
G) A) and B)

Question 6

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?

Accepted Answer

A)  909
B)  707
C)  634
D)  500
E)  141F) B) and D)
G) A) and C)

Question 7

A company wants to determine its reorder point (R) .Demand is variable and they want to build a safety stock into R.If the average daily demand is 12,the lead time is 5 days,the desired "z" value is 1.96 and the standard deviation of usage during lead time is 3,which of the following is the desired value of R?

Accepted Answer

A)  About 6
B)  About 16
C)  About 61
D)  About 66
E)  About 79F) A) and D)
G) A) and E)

Question 8

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10,which of the following is the standard deviation of usage during lead time?

Accepted Answer

A)  10
B)  20
C)  40
D)  100
E)  400F) A) and B)
G) All of the above

Question 9

Using the fixed-time period inventory model and given an average daily demand of 300 units,4 days between inventory reviews,5 days for lead time,1,200 units of inventory on hand,a "z" of 1.96 and a standard deviation of demand over the review and lead time of 12 units,what quantity should be ordered?

Accepted Answer

The answer of Using the fixed-time period inventory model and...

Question 10

Dependent demand inventory Levels are usually managed by calculations using calculus-driven,cost-minimizing models.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is usually included as an inventory holding cost?

Accepted Answer

A)  Breakage
B)  Order placing
C)  Typing up an order
D)  Quantity discounts
E)  Annualized cost of materialsF) B) and E)
G) C) and D)

Question 12

Fixed-order quantity systems assume a random depletion of inventory,with less than an immediate order when a reorder point is reached.

Accepted Answer

A) True 
 B)False

Question 13

Inventory is defined as the stock of any item or resource used in an organization.

Accepted Answer

A) True 
 B)False

Question 14

What are some of the possible benefits of decreasing inventory order cycle time?

Accepted Answer

The story of the Heineken beer company (...

Question 15

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

Accepted Answer

A)  When the record shows a near maximum balance on hand
B)  When the record shows positive balance but a backorder was written
C)  When quality problems have been discovered with the item
D)  When the item has become obsolete
E)  When the item has been misplaced in the stockroomF) D) and E)
G) None of the above

Question 16

Using the ABC classification system for inventory,which of the following is a true statement?

Accepted Answer

A)  The "C" items are of moderate dollar value per unit
B)  You should allocate about 15 % of the dollar volume to "B" items
C)  The "A" items are of low dollar value per unit
D)  The "A" items are of high dollar value per unit
E)  Inexpensive and low usage items are classified as "C" no matter how criticalF) A) and B)
G) B) and E)

Question 17

Which of the following is not a reason to carry inventory?

Accepted Answer

A)  To provide a safeguard for variation in raw material delivery time
B)  To take advantage of economic purchase-order size
C)  To maintain independence of operations
D)  To meet variation in product demand
E)  To keep the stock out of the hands of competitorsF) C) and D)
G) B) and C)

Question 18

In making any decision that affects inventory size,which of the following costs do not need to be considered?

Accepted Answer

A)  Holding costs
B)  Setup costs
C)  Ordering costs
D)  Fixed costs
E)  Shortage costsF) C) and E)
G) A) and E)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

When material is ordered from a vendor,which of the following is not a reason for delays in the order arriving on time?

Accepted Answer

A)  Normal variation in shipping time
B)  A shortage of material at the vendor's plant causing backlogs
C)  An unexpected strike at the vendor's plant
D)  A lost order
E)  Redundant ordering systemsF) B) and D)
G) A) and E)

Exam 17: Inventory Control

In making any decision that affects inventory size,which of the following costs do not need to be considered?

Correct Answer
verified

The Pareto principle is best applied to which of the following inventory systems?

Correct Answer
verified

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

Correct Answer
verified

Which of the following is usually included as an inventory holding cost?

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When material is ordered from a vendor,which of the following is not a reason for delays in the order arriving on time?

Correct Answer
verified

Inventory is defined as the stock of any item or resource used in an organization.

Correct Answer
verified

What are some of the possible benefits of decreasing inventory order cycle time?

Correct Answer
verified
The story of the Heineken beer company (...
View Answer

Fixed-order quantity systems assume a random depletion of inventory,with less than an immediate order when a reorder point is reached.

Correct Answer
verified

Using the ABC classification system for inventory,which of the following is a true statement?

Correct Answer
verified

Dependent demand inventory Levels are usually managed by calculations using calculus-driven,cost-minimizing models.

Correct Answer
verified

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10,which of the following is the standard deviation of usage during lead time?

Correct Answer
verified

Correct Answer
verified

Assuming no safety stock,what is the re-order point (R) given an average daily demand of 78 units and a lead time of 3 days?

Correct Answer
verified

Firms keep supplies of inventory for which of the following reasons?

Correct Answer
verified

Which of the following is not a reason to carry inventory?

Correct Answer
verified

Exam 17: Inventory Control

In making any decision that affects inventory size,which of the following costs do not need to be considered?

Correct AnswerverifiedShow Answer

The Pareto principle is best applied to which of the following inventory systems?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is usually included as an inventory holding cost?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When material is ordered from a vendor,which of the following is not a reason for delays in the order arriving on time?

Correct AnswerverifiedShow Answer

Inventory is defined as the stock of any item or resource used in an organization.

Correct AnswerverifiedShow Answer

What are some of the possible benefits of decreasing inventory order cycle time?

Correct AnswerverifiedThe story of the Heineken beer company (...View AnswerShow Answer

Fixed-order quantity systems assume a random depletion of inventory,with less than an immediate order when a reorder point is reached.

Correct AnswerverifiedShow Answer

Using the ABC classification system for inventory,which of the following is a true statement?

Correct AnswerverifiedShow Answer

Dependent demand inventory Levels are usually managed by calculations using calculus-driven,cost-minimizing models.

Correct AnswerverifiedShow Answer

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10,which of the following is the standard deviation of usage during lead time?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming no safety stock,what is the re-order point (R) given an average daily demand of 78 units and a lead time of 3 days?

Correct AnswerverifiedShow Answer

Firms keep supplies of inventory for which of the following reasons?

Correct AnswerverifiedShow Answer

Which of the following is not a reason to carry inventory?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The story of the Heineken beer company (...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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