Question 1

What is the basic EOQ for a product whose annual demand is 48000 with setup cost $15 and holding cost $5?

Accepted Answer

The answer of What is the basic EOQ for a...

Question 2

Which inventory function helps firms garner quantity discounts?

Accepted Answer

A)  anticipation inventory
B)  fluctuation inventory
C)  lot-size inventory
D)  transportation inventory
E)  speculative inventoryF) D) and E)
G) A) and B)

Question 3

Which of the following is an assumption of the basic EOQ model?

Accepted Answer

A)  Lead time is unknown.
B)  Demand is known and constant.
C)  Orders can arrive in partial shipments.
D)  Quantity discounts are considered.
E)  Lost sales are allowed, but not back orders.F) A) and B)
G) C) and D)

Question 4

What does WIP stand for?

Accepted Answer

The answer of What does WIP stand for?...

Question 5

The ranking in ABC inventory analysis is based on what?

Accepted Answer

A)  annual dollar usage
B)  annual demand in units
C)  alphabetical order
D)  unit price
E)  item numberF) A) and C)
G) C) and E)

Question 6

Jefferson Products offers the following all-units quantity discount schedule for its 4 feet by 8 feet sheets of quality plywood.

Washington Home Furnishings orders plywood from Jefferson Products. The firm has an ordering cost of $50, an annual inventory holding cost percentage of 20%, and an annual demand of 250 sheets. What should the order size be every time that an order is placed?

Accepted Answer

The answer of Jefferson Products offers the following all-units quantity...

Question 7

Any inventory turnover less than 4 is considered to be poor performance.

Accepted Answer

A) True 
 B)False

Question 8

What is the maximum inventory of a product that is produce in batches of 1000 when 500 units are produced per day and 250 units are sold per day?

Accepted Answer

The answer of What is the maximum inventory of a...

Question 9

Consider a periodic review inventory system with a lead time of two weeks and a review period of seven weeks. If the standard deviation of weekly demand is 200 and the desired cycle-service level is 86%, what should the safety stock equal?

Accepted Answer

A)  305
B)  516
C)  600
D)  648
E)  1944F) C) and E)
G) B) and E)

Question 10

The textbook discusses that in the service industry it is not uncommon for retailers not to be able to __________ specific merchandise.

Accepted Answer

The answer of The textbook discusses that in the service...

Question 11

If inventory records fail to accurately reflect the quantity of materials available, all except which of the following may occur?

Accepted Answer

A)  poor customer service
B)  continuous operations
C)  lower productivity
D)  poor material planning
E)  excessive expeditingF) A) and B)
G) A) and C)

Question 12

The two major decisions to be made when using the periodic review system are the target inventory level and the order quantity.

Accepted Answer

A) True 
 B)False

Question 13

What is the formula for inventory turnover?

Accepted Answer

A)  annual cost of goods sold / average inventory in dollars
B)  annual sales / average inventory in dollars
C)  average inventory in dollars / annual cost of goods sold
D)  average inventory in dollars / annual sales
E)  annual cost of goods sold / annual holding costF) D) and E)
G) None of the above

Question 14

Which of the following is not an identified reason why manufacturing firms do not use optimal EOQ order quantities?

Accepted Answer

A)  do not have known uniform demand
B)  some suppliers have a minimum order quantity
C)  how the material is shipped
D)  what the sales price is
E)  insufficient storage spaceF) B) and C)
G) B) and E)

Question 15

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Accepted Answer

A)  The EPQ model produces a lower total annual cost.
B)  The maximum inventory level is lower under the EPQ model than under the EOQ model.
C)  The two models use different formulas to compute annual ordering cost.
D)  The inventory depletion rate is the same for both models.
E)  The two models use different formulas to compute annual holding cost.F) A) and E)
G) A) and B)

Question 16

If the costs (S and H) and demands (D) are the same, which of the following is true with regard to the EPQ model as compared to the EOQ model?

Accepted Answer

A)  The lot size under the EPQ model is bigger than under the EOQ model.
B)  The maximum inventory level is higher under the EPQ model than under the EOQ model.
C)  The two models use different formulas to compute annual ordering cost.
D)  The inventory depletion rate is not the same for both models.
E)  Both models use the same formula to compute annual holding cost.F) A) and B)
G) None of the above

Question 17

The inventory objective of customer service is measured by any of the following except _______________.

Accepted Answer

A)  weeks of supply
B)  percentage of dollar volume shipped on schedule
C)  idle time due to component and material shortages
D)  percentage of orders shipped on schedule
E)  percentage of line items shipped on scheduleF) A) and C)
G) D) and E)

Question 18

How can the EPQ model be economically reconciled with just-in-time (JIT) production?

Accepted Answer

A)  Reduce annual demand (
D)  .
B)  Increase annual holding cost per unit (H) .
C)  Decrease ordering cost (S) .
D)  Increase annual holding cost per unit (H) and Decrease ordering cost (S) .
E)  The two cannot be reconciled.F) A) and D)
G) A) and B)

Question 19

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Accepted Answer

A)  The EPQ model produces a lower total annual cost.
B)  The maximum inventory level is lower under the EPQ model than under the EOQ model.
C)  Both models use the same formula to compute annual ordering cost.
D)  The inventory depletion rate is the same for both models.
E)  Both models use the same formula to compute annual holding cost.F) All of the above
G) B) and D)

Question 20

Consider a periodic review system with a lead time of 2 weeks, a review period of 4 weeks, average weekly demand of 100 units, standard deviation of weekly demand of 20 units, and a desired cycle-service level of 90%. (a)What is the target inventory level? (b)If it is time to review the item and 10 units are on hand, how many units should be ordered?

Accepted Answer

(a)(100)(2+4)+ 63 = ...

Exam 12: Independent Demand Inventory Management

What is the maximum inventory of a product that is produce in batches of 1000 when 500 units are produced per day and 250 units are sold per day?

Correct Answer
verified

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Correct Answer
verified

How can the EPQ model be economically reconciled with just-in-time (JIT) production?

Correct Answer
verified

If inventory records fail to accurately reflect the quantity of materials available, all except which of the following may occur?

Correct Answer
verified

The ranking in ABC inventory analysis is based on what?

Correct Answer
verified

What does WIP stand for?

Correct Answer
verified

Correct Answer
verified

The inventory objective of customer service is measured by any of the following except _______________.

Correct Answer
verified

The two major decisions to be made when using the periodic review system are the target inventory level and the order quantity.

Correct Answer
verified

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Correct Answer
verified

Any inventory turnover less than 4 is considered to be poor performance.

Correct Answer
verified

What is the formula for inventory turnover?

Correct Answer
verified

Which inventory function helps firms garner quantity discounts?

Correct Answer
verified

What is the basic EOQ for a product whose annual demand is 48000 with setup cost $15 and holding cost $5?

Correct Answer
verified

Which of the following is an assumption of the basic EOQ model?

Correct Answer
verified

The textbook discusses that in the service industry it is not uncommon for retailers not to be able to __________ specific merchandise.

Correct Answer
verified

Which of the following is not an identified reason why manufacturing firms do not use optimal EOQ order quantities?

Correct Answer
verified

Consider a periodic review inventory system with a lead time of two weeks and a review period of seven weeks. If the standard deviation of weekly demand is 200 and the desired cycle-service level is 86%, what should the safety stock equal?

Correct Answer
verified

If the costs (S and H) and demands (D) are the same, which of the following is true with regard to the EPQ model as compared to the EOQ model?

Correct Answer
verified

Correct Answer
verified
(a)(100)(2+4)+ 63 = ...
View Answer

Exam 12: Independent Demand Inventory Management

What is the maximum inventory of a product that is produce in batches of 1000 when 500 units are produced per day and 250 units are sold per day?

Correct AnswerverifiedShow Answer

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Correct AnswerverifiedShow Answer

How can the EPQ model be economically reconciled with just-in-time (JIT) production?

Correct AnswerverifiedShow Answer

If inventory records fail to accurately reflect the quantity of materials available, all except which of the following may occur?

Correct AnswerverifiedShow Answer

The ranking in ABC inventory analysis is based on what?

Correct AnswerverifiedShow Answer

What does WIP stand for?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The inventory objective of customer service is measured by any of the following except _______________.

Correct AnswerverifiedShow Answer

The two major decisions to be made when using the periodic review system are the target inventory level and the order quantity.

Correct AnswerverifiedShow Answer

If the costs (S and H) and demands (D) are the same, which of the following is not true with regard to the EPQ model as compared to the EOQ model?

Correct AnswerverifiedShow Answer

Any inventory turnover less than 4 is considered to be poor performance.

Correct AnswerverifiedShow Answer

What is the formula for inventory turnover?

Correct AnswerverifiedShow Answer

Which inventory function helps firms garner quantity discounts?

Correct AnswerverifiedShow Answer

What is the basic EOQ for a product whose annual demand is 48000 with setup cost $15 and holding cost $5?

Correct AnswerverifiedShow Answer

Which of the following is an assumption of the basic EOQ model?

Correct AnswerverifiedShow Answer

The textbook discusses that in the service industry it is not uncommon for retailers not to be able to __________ specific merchandise.

Correct AnswerverifiedShow Answer

Which of the following is not an identified reason why manufacturing firms do not use optimal EOQ order quantities?

Correct AnswerverifiedShow Answer

Consider a periodic review inventory system with a lead time of two weeks and a review period of seven weeks. If the standard deviation of weekly demand is 200 and the desired cycle-service level is 86%, what should the safety stock equal?

Correct AnswerverifiedShow Answer

If the costs (S and H) and demands (D) are the same, which of the following is true with regard to the EPQ model as compared to the EOQ model?

Correct AnswerverifiedShow Answer

Correct Answerverified(a)(100)(2+4)+ 63 = ...View AnswerShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
verified
(a)(100)(2+4)+ 63 = ...
View Answer