Question 1

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

Accepted Answer

A)  20
B)  square root of 200
C)  200
D)  400
E)  none of theseF) B) and C)
G) D) and E)

Question 2

The management of supply chain inventories focuses on:

Accepted Answer

A)  internal inventories
B)  external inventories
C)  both internal and external inventories
D)  safety stock elimination
E)  optimizing reorder pointsF) C) and D)
G) A) and B)

Question 3

The manager of a bakery orders three 'cake-to-go' wedding cakes every Saturday to accommodate last minute purchases.Demand for the cakes can be described by a Poisson distribution that has a mean of 2.The cakes cost $10 each to prepare, and they sell for $26 each.Any cakes that haven't been sold by the end of the day are sold for half price the next day.Usually, half of those are sold and the rest are tossed.What stocking level would be appropriate?

Accepted Answer

Cs = $26 - $10 = $16
Ce = $10 ...

Question 4

The two main concerns of inventory control relate to the costs and the level of customer service.

Accepted Answer

A) True 
 B)False

Question 5

Which one of the following is not generally a determinant of the reorder point?

Accepted Answer

A)  rate of demand
B)  length of lead time
C)  lead time variability
D)  stockout risk
E)  purchase costF) A) and C)
G) A) and B)

Question 6

All of the following are possible reasons for using the fixed order interval model except:

Accepted Answer

A)  Supplier policy encourages use.
B)  Grouping orders can save in shipping costs.
C)  The required safety stock is lower than with an EOQ/ROP model.
D)  It is suited to periodic checks of inventory levels rather than continuous monitoring.
E)  Continuous monitoring is not practical.F) C) and E)
G) B) and C)

Question 7

The basic EOQ model ignores the purchasing cost.

Accepted Answer

A) True 
 B)False

Question 8

Safety stock eliminates all stock outs.

Accepted Answer

A) True 
 B)False

Question 9

At what point should she reorder pepperoni?

Accepted Answer

A)  20 pounds remaining
B)  40 pounds remaining
C)  60 pounds remaining
D)  80 pounds remaining
E)  100 pounds remainingF) B) and D)
G) A) and C)

Question 10

In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately:

Accepted Answer

A)  11
B)  20
C)  24
D)  28
E)  375F) B) and E)
G) C) and D)

Question 11

Understocking an inventory item is a sure sign of inadequate inventory control.

Accepted Answer

A) True 
 B)False

Question 12

For the economic order quantity, what are average weekly total costs, including the cost of the inventory item?

Accepted Answer

The answer of For the economic order quantity, what are...

Question 13

For the economic order quantity, what is the length of an order cycle?

Accepted Answer

The answer of For the economic order quantity, what is...

Question 14

Which of the following interactions with vendors would potentially lead to inventory reductions?

Accepted Answer

A)  reduce lead times
B)  increase safety stock
C)  less frequent purchases
D)  larger batch quantities
E)  longer order intervalsF) A) and D)
G) B) and C)

Question 15

Estimated demand for gold-filled lockets at Sam's Bargain Jewelry and Housewares is 2,420 lockets a year.Manager Veronica Winters has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each.What order size will minimize total cost if carrying cost is $.18 per locket on an annual basis?

Accepted Answer

D = 2,420 lockets per year
S =...

Question 16

Which of the following is not one of the assumptions of the basic EOQ model?

Accepted Answer

A)  Annual demand requirements are known and constant.
B)  Lead time does not vary.
C)  Each order is received in a single delivery.
D)  Quantity discounts are available.
E)  All of the above are necessary assumptions.F) B) and C)
G) B) and E)

Question 17

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

Accepted Answer

A)  It doubles.
B)  It is four times its previous amount.
C)  It is half its previous amount.
D)  It is about 70 percent of its previous amount.
E)  It increases by about 40 percent.F) C) and D)
G) A) and B)

Question 18

A cycle count program will usually require that 'A' items be counted:

Accepted Answer

A)  daily.
B)  once a week.
C)  monthly.
D)  quarterly.
E)  more frequently than annually.F) A) and C)
G) B) and C)

Question 19

Which is not a true assumption in the EOQ model?

Accepted Answer

A)  Production rate is constant
B)  Lead time doesn't vary
C)  No more than 3 items are involved
D)  Usage rate is constant
E)  No quantity discountsF) A) and B)
G) A) and C)

Question 20

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

Accepted Answer

A)  10
B)  30
C)  50
D)  70
E)  90F) A) and E)
G) A) and D)

Exam 13: Inventory Management

Which of the following is not one of the assumptions of the basic EOQ model?

Correct Answer
verified

Correct Answer
verified
D = 2,420 lockets per year
S =...
View Answer

In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately:

Correct Answer
verified

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

Correct Answer
verified

Correct Answer
verified
Cs = $26 - $10 = $16
Ce = $10 ...
View Answer

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

Correct Answer
verified

Understocking an inventory item is a sure sign of inadequate inventory control.

Correct Answer
verified

Safety stock eliminates all stock outs.

Correct Answer
verified

For the economic order quantity, what is the length of an order cycle?

Correct Answer
verified

All of the following are possible reasons for using the fixed order interval model except:

Correct Answer
verified

Which one of the following is not generally a determinant of the reorder point?

Correct Answer
verified

The basic EOQ model ignores the purchasing cost.

Correct Answer
verified

A cycle count program will usually require that 'A' items be counted:

Correct Answer
verified

At what point should she reorder pepperoni?

Correct Answer
verified

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

Correct Answer
verified

The management of supply chain inventories focuses on:

Correct Answer
verified

Which is not a true assumption in the EOQ model?

Correct Answer
verified

Which of the following interactions with vendors would potentially lead to inventory reductions?

Correct Answer
verified

The two main concerns of inventory control relate to the costs and the level of customer service.

Correct Answer
verified

For the economic order quantity, what are average weekly total costs, including the cost of the inventory item?

Correct Answer
verified

Exam 13: Inventory Management

Which of the following is not one of the assumptions of the basic EOQ model?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD = 2,420 lockets per yearS =...View AnswerShow Answer

In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately:

Correct AnswerverifiedShow Answer

In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCs = $26 - $10 = $16Ce = $10 ...View AnswerShow Answer

In an A-B-C system, the typical percentage of the number of items in inventory for A items is about:

Correct AnswerverifiedShow Answer

Understocking an inventory item is a sure sign of inadequate inventory control.

Correct AnswerverifiedShow Answer

Safety stock eliminates all stock outs.

Correct AnswerverifiedShow Answer

For the economic order quantity, what is the length of an order cycle?

Correct AnswerverifiedShow Answer

All of the following are possible reasons for using the fixed order interval model except:

Correct AnswerverifiedShow Answer

Which one of the following is not generally a determinant of the reorder point?

Correct AnswerverifiedShow Answer

The basic EOQ model ignores the purchasing cost.

Correct AnswerverifiedShow Answer

A cycle count program will usually require that 'A' items be counted:

Correct AnswerverifiedShow Answer

At what point should she reorder pepperoni?

Correct AnswerverifiedShow Answer

In the basic EOQ model, an annual demand of 40 units, an ordering cost of $5, and a holding cost of $1 per unit per year will result in an EOQ of:

Correct AnswerverifiedShow Answer

The management of supply chain inventories focuses on:

Correct AnswerverifiedShow Answer

Which is not a true assumption in the EOQ model?

Correct AnswerverifiedShow Answer

Which of the following interactions with vendors would potentially lead to inventory reductions?

Correct AnswerverifiedShow Answer

The two main concerns of inventory control relate to the costs and the level of customer service.

Correct AnswerverifiedShow Answer

For the economic order quantity, what are average weekly total costs, including the cost of the inventory item?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
D = 2,420 lockets per year
S =...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cs = $26 - $10 = $16
Ce = $10 ...
View Answer

Correct Answer
verified

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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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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