Question 1

Suppose that a newspaper stand is operating under the following conditions; papers cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by $.1, what is the increase in service level?

Accepted Answer

A)   .5
B)   0
C)   .07
D)   1
E)   unable to determine given only the above informationF) B) and C)
G) C) and D)

Question 2

List the four types of inventory.

Accepted Answer

The four types of inventory ar...

Question 3

Define service level.

Accepted Answer

The service level is the perce...

Question 4

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 inventory decisions only 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 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) All of the above
G) A) and B)

Question 5

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

Accepted Answer

A)   8 units
B)   10 units
C)   16 units
D)   64 units
E)   Cannot be determined without lead time data.F) A) and E)
G) A) and D)

Question 6

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 constant.
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) B) and E)
G) A) and E)

Question 7

Huckaby Motor Services, Inc. rebuilds small electrical items such as motors, alternators, and transformers, all using a certain type of copper wire. The firm's demand for this wire is approximately normal, averaging 20 spools per week, with a standard deviation of 6 spools per week. Cost per spool is $24; ordering costs are $25 per order; inventory handling cost is $4.00 per spool per year. Acquisition lead time is four weeks. The company works 50, 5-day weeks per year.
a. What is the optimal size of an order, if minimization of inventory system cost is the objective?
b. What are the safety stock and reorder point if the desired service level is 90%?

Accepted Answer

Demand is 20 x 50 = 1000 spool...

Question 8

Joe's Camera shop has a favorite model that has annual sales of 145. The cost to place an order to replenish inventory is $25 per order, and annual inventory costs are $20. Assume the store is open 350 days per year.
a. What is the optimal order size?
b. What is the optimal number of orders per year?
c. What is the optimal number of days between orders?
d. What is the annual inventory cost?

Accepted Answer

a. The optimal order size is Q* = <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> = 19....

Question 9

Most inventory models attempt to minimize

Accepted Answer

A)   the likelihood of a stockout
B)   the number of items ordered
C)   total inventory based costs
D)   the number of orders placed
E)   the safety stockF) A) and D)
G) A) and C)

Question 10

In a quantity discount problem, if the savings in product cost is smaller than the increase in the sum of setup cost and holding cost, the discount should be __________.

Accepted Answer

The answer of In a quantity discount problem, if the...

Question 11

Which of the following statements regarding control of service inventories is true?

Accepted Answer

A)   Service inventory is a fictional concept, because services are intangible.
B)   Service inventory needs no safety stock, because there's no such thing as a service stockout.
C)   Effective control of all goods leaving the facility is one applicable technique.
D)   Service inventory has carrying costs but no setup costs.
E)   Good personnel selection, training, and discipline are easy.F) C) and E)
G) A) and E)

Exam 12: Inventory Management

Suppose that a newspaper stand is operating under the following conditions; papers cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by $.1, what is the increase in service level?

Correct Answer
verified

Correct Answer
verified
Demand is 20 x 50 = 1000 spool...
View Answer

Most inventory models attempt to minimize

Correct Answer
verified

Define service level.

Correct Answer
verified
The service level is the perce...
View Answer

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

Correct Answer
verified

List the four types of inventory.

Correct Answer
verified
The four types of inventory ar...
View Answer

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

Correct Answer
verified

Correct Answer
verified
a. The optimal order size is Q* = = 19....
View Answer

In a quantity discount problem, if the savings in product cost is smaller than the increase in the sum of setup cost and holding cost, the discount should be __________.

Correct Answer
verified

Which of the following statements regarding control of service inventories is true?

Correct Answer
verified

Which of the following statements about quantity discounts is false?

Correct Answer
verified

Exam 12: Inventory Management

Suppose that a newspaper stand is operating under the following conditions; papers cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by $.1, what is the increase in service level?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedDemand is 20 x 50 = 1000 spool...View AnswerShow Answer

Most inventory models attempt to minimize

Correct AnswerverifiedShow Answer

Define service level.

Correct AnswerverifiedThe service level is the perce...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

List the four types of inventory.

Correct AnswerverifiedThe four types of inventory ar...View AnswerShow Answer

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. The optimal order size is Q* = = 19....View AnswerShow Answer

In a quantity discount problem, if the savings in product cost is smaller than the increase in the sum of setup cost and holding cost, the discount should be __________.

Correct AnswerverifiedShow Answer

Which of the following statements regarding control of service inventories is true?

Correct AnswerverifiedShow Answer

Which of the following statements about quantity discounts is false?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Demand is 20 x 50 = 1000 spool...
View Answer

Correct Answer
verified

Correct Answer
verified
The service level is the perce...
View Answer

Correct Answer
verified

Correct Answer
verified
The four types of inventory ar...
View Answer

Correct Answer
verified

Correct Answer
verified
a. The optimal order size is Q* = = 19....
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified