Question 1

Joe's Donut Hole wishes to estimate an appropriate reorder point for cases of a raw material used in making donut icing. The average daily demand is 2 cases. The lead time for replenishment orders is 10 days with an estimated lead time demand standard deviation of 1 case. For a 95% service level, what should the reorder point for this item be?

Accepted Answer

A)   20
B)   21.64
C)   22
D)   Reorder point cannot be determined from the information givenE) A) and B)
F) All of the above

Question 2

Successfully managing inventories can positively impact all of the following except?

Accepted Answer

A)   Customer service
B)   Product design
C)   Competitiveness
D)   CostE) A) and B)
F) None of the above

Question 3

Safety stock levels in a supply chain tend to be less than for an independently acting firm.

Accepted Answer

A) True 
 B)False

Question 4

All of the following are typical inventory costs except?

Accepted Answer

A)   Order cost
B)   Stockout cost
C)   Inventory carrying cost
D)   Selling costE) C) and D)
F) B) and D)

Question 5

Purchased items that are consumed in-house would be classified as?

Accepted Answer

A)   Raw materials
B)   MRO supplies
C)   Work-in-process
D)   Finished goodsE) B) and C)
F) None of the above

Question 6

The EOQ model assumes that order lead time is?

Accepted Answer

A)   Unknown
B)   Known, but variable
C)   Known and constant
D)   The EOQ model makes no particular assumptions about order lead timeE) A) and B)
F) A) and C)

Question 7

In the ABC Inventory Classification approach, Class A items account for approximately what percentage of a firm's spend?

Accepted Answer

A)   10%
B)   20%
C)   50%
D)   80%E) All of the above
F) C) and D)

Question 8

Which of the following is commonly viewed as "one of the best overall measures" of inventory performance?

Accepted Answer

A)   Inventory days of supply
B)   Days of receivables outstanding
C)   Days payable outstanding
D)   Cash-to-Cash Cycle TimeE) A) and D)
F) B) and C)

Question 9

The EOQ model assumes that inventory carrying costs per unit are?

Accepted Answer

A)   Unknown
B)   Known, but variable
C)   Known and constant
D)   The EOQ model makes no particular assumptions about inventory carrying costs per unitE) A) and B)
F) None of the above

Question 10

The average inventory level held under an EOQ model is given by the formula __________.

Accepted Answer

The answer of The average inventory level held under an...

Question 11

A vending machine restocker would likely operate using a(n) _________ inventory model.

Accepted Answer

The answer of A vending machine restocker would likely operate...

Question 12

The administrative costs associated with purchasing items is?

Accepted Answer

A)   Order cost
B)   Stockout cost
C)   Inventory carrying cost
D)   Purchase costE) A) and B)
F) A) and C)

Question 13

Carrying too much inventory can lead to all of the following except?

Accepted Answer

A)   Plant shutdowns
B)   Inventory write-downs
C)   Excess inventory carrying costs
D)   Storage problemsE) None of the above
F) A) and B)

Question 14

Types of inventories include all of the following except?

Accepted Answer

A)   Raw materials
B)   Returned goods
C)   Work-in-process
D)   Finished goodsE) B) and D)
F) B) and C)

Question 15

Holding too much inventory ____________ the risk of a stockout.

Accepted Answer

A)   Increases
B)   Decreases
C)   Neither increases nor decreases
D)   Impossible to tell the effect of too little inventory on risk of a stockoutE) None of the above
F) A) and D)

Question 16

When WIP inventories are completed they then become?

Accepted Answer

A)   Raw material
B)   Work-in-production
C)   MRO
D)   Finished goodsE) None of the above
F) B) and C)

Question 17

Items that are in an intermediate stage of processing are?

Accepted Answer

A)   Raw materials
B)   MRO supplies
C)   Work-in-process
D)   Finished goodsE) All of the above
F) C) and D)

Question 18

The following are costs associated with the bullwhip effect except?

Accepted Answer

A)   Idle capacity
B)   Reduced supply chain costs
C)   Excess inventory
D)   StockoutsE) A) and D)
F) B) and D)

Question 19

Bread that is baked, packaged, and ready for customers to purchase would be considered to be what type of inventory?

Accepted Answer

A)   Raw material
B)   Work-in-process
C)   MRO
D)   Finished goodsE) B) and C)
F) None of the above

Question 20

In an EOQ model with variable demand, failing to modify the reorder point to include safety stock results in a service level of zero.

Accepted Answer

A) True 
 B)False

Exam 7: Independent Demand Inventory Management

Which of the following is commonly viewed as "one of the best overall measures" of inventory performance?

Correct Answer
verified

Correct Answer
verified

The EOQ model assumes that inventory carrying costs per unit are?

Correct Answer
verified

Holding too much inventory ____________ the risk of a stockout.

Correct Answer
verified

In the ABC Inventory Classification approach, Class A items account for approximately what percentage of a firm's spend?

Correct Answer
verified

A vending machine restocker would likely operate using a(n) _________ inventory model.

Correct Answer
verified

The average inventory level held under an EOQ model is given by the formula __________.

Correct Answer
verified

The administrative costs associated with purchasing items is?

Correct Answer
verified

When WIP inventories are completed they then become?

Correct Answer
verified

Safety stock levels in a supply chain tend to be less than for an independently acting firm.

Correct Answer
verified

Carrying too much inventory can lead to all of the following except?

Correct Answer
verified

Bread that is baked, packaged, and ready for customers to purchase would be considered to be what type of inventory?

Correct Answer
verified

Successfully managing inventories can positively impact all of the following except?

Correct Answer
verified

Purchased items that are consumed in-house would be classified as?

Correct Answer
verified

The following are costs associated with the bullwhip effect except?

Correct Answer
verified

Types of inventories include all of the following except?

Correct Answer
verified

The EOQ model assumes that order lead time is?

Correct Answer
verified

All of the following are typical inventory costs except?

Correct Answer
verified

In an EOQ model with variable demand, failing to modify the reorder point to include safety stock results in a service level of zero.

Correct Answer
verified

Items that are in an intermediate stage of processing are?

Correct Answer
verified

Exam 7: Independent Demand Inventory Management

Which of the following is commonly viewed as "one of the best overall measures" of inventory performance?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The EOQ model assumes that inventory carrying costs per unit are?

Correct AnswerverifiedShow Answer

Holding too much inventory ____________ the risk of a stockout.

Correct AnswerverifiedShow Answer

In the ABC Inventory Classification approach, Class A items account for approximately what percentage of a firm's spend?

Correct AnswerverifiedShow Answer

A vending machine restocker would likely operate using a(n) _________ inventory model.

Correct AnswerverifiedShow Answer

The average inventory level held under an EOQ model is given by the formula __________.

Correct AnswerverifiedShow Answer

The administrative costs associated with purchasing items is?

Correct AnswerverifiedShow Answer

When WIP inventories are completed they then become?

Correct AnswerverifiedShow Answer

Safety stock levels in a supply chain tend to be less than for an independently acting firm.

Correct AnswerverifiedShow Answer

Carrying too much inventory can lead to all of the following except?

Correct AnswerverifiedShow Answer

Bread that is baked, packaged, and ready for customers to purchase would be considered to be what type of inventory?

Correct AnswerverifiedShow Answer

Successfully managing inventories can positively impact all of the following except?

Correct AnswerverifiedShow Answer

Purchased items that are consumed in-house would be classified as?

Correct AnswerverifiedShow Answer

The following are costs associated with the bullwhip effect except?

Correct AnswerverifiedShow Answer

Types of inventories include all of the following except?

Correct AnswerverifiedShow Answer

The EOQ model assumes that order lead time is?

Correct AnswerverifiedShow Answer

All of the following are typical inventory costs except?

Correct AnswerverifiedShow Answer

In an EOQ model with variable demand, failing to modify the reorder point to include safety stock results in a service level of zero.

Correct AnswerverifiedShow Answer

Items that are in an intermediate stage of processing are?

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
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Correct Answer
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