Question 1

Identify three techniques to control service inventories.

Accepted Answer

(1) good personnel selection, ...

Question 2

At the economic order quantity, holding costs are equal to product costs.

Accepted Answer

A) True 
 B)False

Question 3

Define shrinkage. Identify three or more examples of shrinkage.

Accepted Answer

Shrinkage is retail inventory ...

Question 4

The purpose of safety stock is to:

Accepted Answer

A)   replace failed units with good ones.
B)   eliminate the possibility of a stockout.
C)   eliminate the likelihood of a stockout due to erroneous inventory tally.
D)   control the likelihood of a stockout due to variable demand and/or lead time.
E)   protect the firm from a sudden decrease in demand.F) C) and D)
G) B) and C)

Question 5

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

Accepted Answer

The answer of In an economic order quantity problem, the...

Question 6

The reorder point is the inventory level at which action is taken to replenish the stocked item.

Accepted Answer

A) True 
 B)False  True

Question 7

Consider the all-units quantity discount schedule below. The annual demand is 90,000 units, setup cost is $1000 per order, and annual holding cost is 30% of the unit cost. What is the optimal order quantity?

Accepted Answer

A)   1500
B)   1690
C)   1414
D)   1000
E)   1549F) A) and C)
G) C) and D)

Question 8

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

Accepted Answer

A) True 
 B)False

Question 9

Q is to ________ systems as P is to ________ systems.

Accepted Answer

A)   fixed quantity, fixed period
B)   variable demand, constant demand
C)   variable lead time, variable demand
D)   variable quantity, variable period
E)   quality, priceF) D) and E)
G) A) and D)

Question 10

Which of the following statements regarding Amazon.com is FALSE?

Accepted Answer

A)   The company was opened by Jeff Bezos in 1995.
B)   The company was founded as a "virtual" retailer with no inventory.
C)   The company is now a world-class leader in warehouse automation and management.
D)   The company uses both United Parcel Service and the U.S. Postal Service as shippers.
E)   Amazon obtains its competitive advantage mainly through effective worker scheduling.F) B) and D)
G) A) and D)

Question 11

A container of surgical equipment valued at $300,000, currently located in Houston, TX, needs to be delivered to the San Clemente, CA, plant. The annual holding cost rate for this type of item has been estimated at 15%. There are five carriers available. Their delivery time and costs are listed in the table below. Which carrier is most economical?

Accepted Answer

Daily holding cost =...

Question 12

Which of the following statements regarding the reorder point is TRUE?

Accepted Answer

A)   The reorder point is that quantity that triggers an action to restock an item.
B)   There is a reorder point even if lead time and demand during lead time are constant.
C)   The reorder point is larger than d × L if safety stock is present.
D)   A shorter lead time implies a smaller reorder point.
E)   All of these are true.F) C) and D)
G) A) and C)

Question 13

Briefly describe how to conduct the factor weighting approach to supplier evaluation.

Accepted Answer

The factor weighting technique simultaneously considers multiple supplier criteria. First a set of important selection criteria must be chosen. Then an importance weight must be assigned to each factor. These weights often sum to 100%. Then each potential supplier is scored on each selection criterion according to the same numerical scale . Finally, each supplier's weighted total score equals the sum over all selection criteria of the product of that supplier's score multiplied by the importance weight for that criterion. The supplier with the highest total scored is deemed most attractive.

Question 14

A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $10, and trees sell for $40. What should the service level be?

Accepted Answer

A)   0.60
B)   0.20
C)   0.75
D)   0.84
E)   unable to determine given the above informationF) A) and E)
G) A) and B)

Question 15

Choosing suppliers simply based on the lowest bid has become a popular approach.

Accepted Answer

A) True 
 B)False  False

Question 16

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

Accepted Answer

From formula (S11-1), we notice that whe...

Question 17

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

Accepted Answer

A)   unchanged.
B)   increased by less than 50%.
C)   increased by 50%.
D)   increased by more than 50%.
E)   cannot be determinedF) All of the above
G) D) and E)

Question 18

Explain how the solution procedure for the warehouse storage location problem uses a "bang-for-the-buck" approach.

Accepted Answer

The "bang" (value) here is the number of...

Question 19

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very front (closest to the dock) ?

Accepted Answer

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

Question 20

What tracks both receipts and subtractions from inventory on a continuing basis?

Accepted Answer

A)   perpetual inventory
B)   periodic system
C)   cycle counting
D)   ABC analysis
E)   shrinkageF) A) and B)
G) B) and C)

Exam 11: Inventory Management

Identify three techniques to control service inventories.

Correct Answer
verified
(1) good personnel selection, ...
View Answer

At the economic order quantity, holding costs are equal to product costs.

Correct Answer
verified

Define shrinkage. Identify three or more examples of shrinkage.

Correct Answer
verified
Shrinkage is retail inventory ...
View Answer

The purpose of safety stock is to:

Correct Answer
verified

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

Correct Answer
verified

The reorder point is the inventory level at which action is taken to replenish the stocked item.

Correct Answer
verified
True

Consider the all-units quantity discount schedule below. The annual demand is 90,000 units, setup cost is $1000 per order, and annual holding cost is 30% of the unit cost. What is the optimal order quantity?

Correct Answer
verified

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

Correct Answer
verified

Q is to systems as P is to systems.

Correct Answer
verified

Which of the following statements regarding Amazon.com is FALSE?

Correct Answer
verified

Correct Answer
verified
Daily holding cost =...
View Answer

Which of the following statements regarding the reorder point is TRUE?

Correct Answer
verified

Briefly describe how to conduct the factor weighting approach to supplier evaluation.

Correct Answer
verified

Choosing suppliers simply based on the lowest bid has become a popular approach.

Correct Answer
verified
False

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

Correct Answer
verified
From formula (S11-1), we notice that whe...
View Answer

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

Correct Answer
verified

Explain how the solution procedure for the warehouse storage location problem uses a "bang-for-the-buck" approach.

Correct Answer
verified
The "bang" (value) here is the number of...
View Answer

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very front (closest to the dock) ?

Correct Answer
verified

What tracks both receipts and subtractions from inventory on a continuing basis?

Correct Answer
verified

Exam 11: Inventory Management

Identify three techniques to control service inventories.

Correct Answerverified(1) good personnel selection, ...View AnswerShow Answer

At the economic order quantity, holding costs are equal to product costs.

Correct AnswerverifiedShow Answer

Define shrinkage. Identify three or more examples of shrinkage.

Correct AnswerverifiedShrinkage is retail inventory ...View AnswerShow Answer

The purpose of safety stock is to:

Correct AnswerverifiedShow Answer

In an economic order quantity problem, the total annual cost curve is at its ________ where annual holding costs equal annual setup costs.

Correct AnswerverifiedShow Answer

The reorder point is the inventory level at which action is taken to replenish the stocked item.

Correct AnswerverifiedTrue

Consider the all-units quantity discount schedule below. The annual demand is 90,000 units, setup cost is $1000 per order, and annual holding cost is 30% of the unit cost. What is the optimal order quantity?

Correct AnswerverifiedShow Answer

ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings.

Correct AnswerverifiedShow Answer

Q is to ________ systems as P is to ________ systems.

Correct AnswerverifiedShow Answer

Which of the following statements regarding Amazon.com is FALSE?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDaily holding cost =...View AnswerShow Answer

Which of the following statements regarding the reorder point is TRUE?

Correct AnswerverifiedShow Answer

Briefly describe how to conduct the factor weighting approach to supplier evaluation.

Correct AnswerverifiedShow Answer

Choosing suppliers simply based on the lowest bid has become a popular approach.

Correct AnswerverifiedFalse

For the disaster risk decision tree model, explain why an increase in S and an increase in U have the opposite impact on the choice of how many suppliers to use. What is the implication of these two phenomena taken together?

Correct AnswerverifiedFrom formula (S11-1), we notice that whe...View AnswerShow Answer

A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:

Correct AnswerverifiedShow Answer

Explain how the solution procedure for the warehouse storage location problem uses a "bang-for-the-buck" approach.

Correct AnswerverifiedThe "bang" (value) here is the number of...View AnswerShow Answer

The items listed below are stored in a one-dock warehouse. Which of them should be stored at the very front (closest to the dock) ?

Correct AnswerverifiedShow Answer

What tracks both receipts and subtractions from inventory on a continuing basis?

Correct AnswerverifiedShow Answer

Correct Answer
verified
(1) good personnel selection, ...
View Answer

Correct Answer
verified

Correct Answer
verified
Shrinkage is retail inventory ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Q is to systems as P is to systems.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Daily holding cost =...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
False

Correct Answer
verified
From formula (S11-1), we notice that whe...
View Answer

Correct Answer
verified

Correct Answer
verified
The "bang" (value) here is the number of...
View Answer

Correct Answer
verified

Correct Answer
verified