Question 1

Perform an ABC analysis on the following set of products.

Accepted Answer

The table below details the contribution...

Question 2

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 750 units. What is the average inventory for this problem?

Accepted Answer

A)   61
B)   245
C)   300
D)   375
E)   600F) D) and E)
G) A) and B)

Question 3

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.

Accepted Answer

A) True 
 B)False

Question 4

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* =

Accepted Answer

A)   is smaller than the holding cost per unit.
B)   is zero.
C)   is one-half of the economic order quantity.
D)   goes down if the setup cost per order goes up.
E)   goes down if the holding cost per unit goes down.F) B) and C)
G) A) and E)

Question 5

Your company has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on the data. Over which product do you suggest the firm keep the least control?

Accepted Answer

A)   R11
B)   S22
C)   T33
D)   U44
E)   V55F) A) and B)
G) All of the above

Question 6

Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about quantity discounts is FALSE?

Accepted Answer

A)   The cost-minimizing solution may or may not be where annual holding costs equal annual ordering costs.
B)   In inventory management, item cost becomes relevant to order quantity decisions when a quantity discount is available.
C)   If carrying costs are expressed as a percentage of value, EOQ is larger at each lower price in the discount schedule.
D)   The larger the annual demand, the less attractive a discount schedule will be.
E)   The smaller the ordering cost, the less attractive a discount schedule will be.F) C) and D)
G) B) and C)

Question 8

In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

Accepted Answer

A) True 
 B)False

Question 9

The items listed below are stored in a one-dock warehouse. In what order should they be placed in the warehouse (moving from closest to the dock to furthest away from the dock) ?

Accepted Answer

A)   E-C-B-A-D
B)   C-A-E-B-D
C)   A-C-E-D-B
D)   B-C-D-E-A
E)   D-A-B-C-EF) A) and E)
G) A) and D)

Question 10

The primary trade-off in transportation mode analysis involves evaluating ordering cost against the cost of shipping.

Accepted Answer

A) True 
 B)False

Question 11

A disadvantage of the fixed-period inventory system is that:

Accepted Answer

A)   it involves higher ordering costs than the fixed quantity inventory system.
B)   additional inventory records are required.
C)   the average inventory level is decreased.
D)   since there is no count of inventory during the review period, a stockout is possible.
E)   orders usually are for larger quantities.F) C) and D)
G) B) and E)

Question 12

What is the primary purpose of the basic economic order quantity model shown below? Q* =

Accepted Answer

A)   to calculate the reorder point, so that replenishments take place at the proper time
B)   to minimize the sum of carrying cost and holding cost
C)   to maximize the customer service level
D)   to minimize the sum of setup cost and holding cost
E)   to calculate the optimum safety stockF) A) and D)
G) B) and E)

Question 13

In the production order quantity model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a smaller production/order quantity than in an otherwise identical EOQ problem.

Accepted Answer

A) True 
 B)False

Question 14

________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Accepted Answer

The answer of ________ inventory is material that is usually...

Question 15

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

Accepted Answer

A)   item quality
B)   unit price
C)   the number of units on hand
D)   annual demand
E)   annual dollar volumeF) A) and B)
G) A) and C)

Question 16

Consider a supply chain where a retailer orders from a wholesaler who orders from a manufacturer who orders from a supplier. The retailer's monthly standard deviation of demand is 20 units. The standard deviation of orders was 30, 60, 70, and 40 units for the retailer, wholesaler, manufacturer, and supplier, respectively. Which of the following is TRUE?

Accepted Answer

A)   The supplier's bullwhip measure is 0.5714.
B)   The wholesaler's bullwhip measure is 4.
C)   The manufacturer is providing a dampening effect.
D)   The retailer contributes most to the bullwhip effect in the supply chain.
E)   The wholesaler's bullwhip measure is 2.F) All of the above
G) B) and D)

Question 17

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* =

Accepted Answer

A)   Demand is known, constant, and independent.
B)   Lead time is known and consistent.
C)   Quantity discounts are not possible.
D)   Production and use can occur simultaneously.
E)   The only variable costs are setup cost and holding (or carrying)  cost.F) A) and E)
G) A) and C)

Question 18

The primary trade-off in warehouse storage location analysis involves evaluating the number of trips taken for an item vs. the physical weight of that item.

Accepted Answer

A) True 
 B)False

Question 19

A product whose EOQ is 40 units experiences an increase in ordering cost from $10 per order to $90 per order. The revised EOQ is:

Accepted Answer

A)   three times as large.
B)   one-third as large.
C)   nine times as large.
D)   one-ninth as large.
E)   cannot be determinedF) C) and E)
G) A) and C)

Question 20

Describe the difference between a fixed-quantity and a fixed-period inventory system?

Accepted Answer

In a fixed-quantity inventory system, wh...

Exam 11: Inventory Management

The items listed below are stored in a one-dock warehouse. In what order should they be placed in the warehouse (moving from closest to the dock to furthest away from the dock) ?

Correct Answer
verified

The primary trade-off in warehouse storage location analysis involves evaluating the number of trips taken for an item vs. the physical weight of that item.

Correct Answer
verified

A disadvantage of the fixed-period inventory system is that:

Correct Answer
verified

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.

Correct Answer
verified

In the production order quantity model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a smaller production/order quantity than in an otherwise identical EOQ problem.

Correct Answer
verified

The primary trade-off in transportation mode analysis involves evaluating ordering cost against the cost of shipping.

Correct Answer
verified

Your company has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on the data. Over which product do you suggest the firm keep the least control?

Correct Answer
verified

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* =

Correct Answer
verified

A product whose EOQ is 40 units experiences an increase in ordering cost from $10 per order to $90 per order. The revised EOQ is:

Correct Answer
verified

Perform an ABC analysis on the following set of products.

Correct Answer
verified
The table below details the contribution...
View Answer

Correct Answer
verified

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* =

Correct Answer
verified

What is the primary purpose of the basic economic order quantity model shown below? Q* =

Correct Answer
verified

Describe the difference between a fixed-quantity and a fixed-period inventory system?

Correct Answer
verified
In a fixed-quantity inventory system, wh...
View Answer

Which of the following statements about quantity discounts is FALSE?

Correct Answer
verified

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 750 units. What is the average inventory for this problem?

Correct Answer
verified

________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Correct Answer
verified

Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

Correct Answer
verified

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

Correct Answer
verified

In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

Correct Answer
verified

Exam 11: Inventory Management

The items listed below are stored in a one-dock warehouse. In what order should they be placed in the warehouse (moving from closest to the dock to furthest away from the dock) ?

Correct AnswerverifiedShow Answer

The primary trade-off in warehouse storage location analysis involves evaluating the number of trips taken for an item vs. the physical weight of that item.

Correct AnswerverifiedShow Answer

A disadvantage of the fixed-period inventory system is that:

Correct AnswerverifiedShow Answer

In the quantity discount model, it is possible to have a cost-minimizing solution where annual ordering costs do not equal annual carrying costs.

Correct AnswerverifiedShow Answer

In the production order quantity model, inventory does not arrive in a single moment but flows in at a steady rate, resulting in a smaller production/order quantity than in an otherwise identical EOQ problem.

Correct AnswerverifiedShow Answer

The primary trade-off in transportation mode analysis involves evaluating ordering cost against the cost of shipping.

Correct AnswerverifiedShow Answer

Your company has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on the data. Over which product do you suggest the firm keep the least control?

Correct AnswerverifiedShow Answer

Which of the following is NOT an assumption of the economic order quantity model shown below? Q* =

Correct AnswerverifiedShow Answer

A product whose EOQ is 40 units experiences an increase in ordering cost from $10 per order to $90 per order. The revised EOQ is:

Correct AnswerverifiedShow Answer

Perform an ABC analysis on the following set of products.

Correct AnswerverifiedThe table below details the contribution...View AnswerShow Answer

Correct AnswerverifiedShow Answer

If the actual order quantity is the economic order quantity in a problem that meets the assumptions of the economic order quantity model shown below, the average amount of inventory on hand: Q* =

Correct AnswerverifiedShow Answer

What is the primary purpose of the basic economic order quantity model shown below? Q* =

Correct AnswerverifiedShow Answer

Describe the difference between a fixed-quantity and a fixed-period inventory system?

Correct AnswerverifiedIn a fixed-quantity inventory system, wh...View AnswerShow Answer

Which of the following statements about quantity discounts is FALSE?

Correct AnswerverifiedShow Answer

A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 750 units. What is the average inventory for this problem?

Correct AnswerverifiedShow Answer

________ inventory is material that is usually purchased, but has yet to enter the manufacturing process.

Correct AnswerverifiedShow Answer

Insurance and taxes on inventory are part of the costs known as setup or ordering costs.

Correct AnswerverifiedShow Answer

ABC analysis divides on-hand inventory into three classes, generally based upon which of the following?

Correct AnswerverifiedShow Answer

In the simple EOQ model, if the carrying cost were to double, the EOQ would also double.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The table below details the contribution...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
In a fixed-quantity inventory system, wh...
View Answer

Correct Answer
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Correct Answer
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