Question 1

Given the same demand, setup/ordering costs, and carrying costs, the EOQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed:

Accepted Answer

A)  greater than the EOQ
B)  equal to the EOQ
C)  smaller than the EOQ
D)  greater than or equal to the EOQ
E)  smaller than or equal to the EOQF) B) and C)
G) B) and D) A

Question 2

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following is implied by an "annual" service level of 95 percent?

Accepted Answer

A)  Approximately 95 percent of demand during lead time will be satisfied.
B)  The probability is 95 percent that demand will exceed supply during lead time.
C)  The probability is 95 percent that demand will equal supply during lead time.
D)  The probability is 95 percent that demand will not exceed supply during lead time.
E)  None of the above.F) B) and E)
G) None of the above

Question 4

The average inventory level is inversely related to order size.

Accepted Answer

A) True 
 B)False

Question 5

What is the economic order quantity for this item?

Accepted Answer

The answer of What is the economic order quantity for...

Question 6

Profit margins tend to be inversely related to inventory turns.

Accepted Answer

A) True 
 B)False

Question 7

Reorder point models are primarily used for dependent demand items.

Accepted Answer

A) True 
 B)False

Question 8

Compared to the EOQ, the economic production quantity would be approximately:

Accepted Answer

A)  the same
B)  20 percent larger
C)  40 percent larger
D)  20 percent smaller
E)  40 percent smallerF) B) and C)
G) All of the above

Question 9

Annual ordering cost is inversely related to order size.

Accepted Answer

A) True 
 B)False

Question 10

What is the economic order quantity?

Accepted Answer

A)  600 bills
B)  3,000 bills
C)  949 bills
D)  6,215 bills
E)  12,500 billsF) B) and E)
G) C) and D) B

Question 11

Which item would be least likely to be ordered under a fixed order interval system?

Accepted Answer

A)  textbooks at a college bookstore
B)  auto parts at an assembly plant
C)  cards at a gift shop
D)  canned peas at a supermarket
E)  none of theseF) A) and C)
G) A) and B)

Question 12

If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

Accepted Answer

A)  0 days
B)  0.25 days
C)  3 days
D)  4 days
E)  5 daysF) A) and B)
G) All of the above

Question 13

If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?

Accepted Answer

A)  4 cases
B)  12 cases
C)  8 cases
D)  20 cases
E)  16 casesF) B) and D)
G) None of the above

Question 14

Cycle stock inventory is intended to deal with ________.

Accepted Answer

A)  excess costs
B)  shortage costs
C)  stockouts
D)  expected demand
E)  quantity discountsF) A) and E)
G) A) and D) D

Question 15

A quantity discount will lower the reorder point.

Accepted Answer

A) True 
 B)False

Question 16

In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must:

Accepted Answer

A)  have the lowest total cost
B)  be in a feasible range
C)  be to the left of the price break quantity for that price
D)  have the largest quantity compared to other EOQ's
E)  none of the aboveF) A) and D)
G) A) and E)

Question 17

The calculation of safety stock requires knowledge of demand and lead time variability.

Accepted Answer

A) True 
 B)False

Question 18

The EOQ model is most relevant for which one of the following?

Accepted Answer

A)  ordering items with dependent demand
B)  determination of safety stock
C)  ordering perishable items
D)  determining fixed interval order quantities
E)  determining fixed order quantitiesF) A) and B)
G) C) and D)

Question 19

The need for safety stocks can be reduced by an operations strategy which:

Accepted Answer

A)  increases lead time
B)  increases lead time variability
C)  increases lot sizes
D)  decreases ordering costs
E)  decreases lead time variabilityF) A) and E)
G) A) and B)

Question 20

For the economic order quantity, what are average weekly carrying costs?

Accepted Answer

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

Exam 13: Inventory Management

Given the same demand, setup/ordering costs, and carrying costs, the EOQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed:

Correct AnswerverifiedA

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Correct AnswerverifiedShow Answer

Which one of the following is implied by an "annual" service level of 95 percent?

Correct AnswerverifiedShow Answer

The average inventory level is inversely related to order size.

Correct AnswerverifiedShow Answer

What is the economic order quantity for this item?

Correct AnswerverifiedShow Answer

Profit margins tend to be inversely related to inventory turns.

Correct AnswerverifiedShow Answer

Reorder point models are primarily used for dependent demand items.

Correct AnswerverifiedShow Answer

Compared to the EOQ, the economic production quantity would be approximately:

Correct AnswerverifiedShow Answer

Annual ordering cost is inversely related to order size.

Correct AnswerverifiedShow Answer

What is the economic order quantity?

Correct AnswerverifiedB

Which item would be least likely to be ordered under a fixed order interval system?

Correct AnswerverifiedShow Answer

If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?

Correct AnswerverifiedShow Answer

If he were to order 16 cases of Stein beer at a time, what would be the average inventory level?

Correct AnswerverifiedShow Answer

Cycle stock inventory is intended to deal with ________.

Correct AnswerverifiedD

A quantity discount will lower the reorder point.

Correct AnswerverifiedShow Answer

In the quantity discount model, with carrying cost stated as a percentage of unit purchase price, in order for the EOQ of the lowest curve to be optimum, it must:

Correct AnswerverifiedShow Answer

The calculation of safety stock requires knowledge of demand and lead time variability.

Correct AnswerverifiedShow Answer

The EOQ model is most relevant for which one of the following?

Correct AnswerverifiedShow Answer

The need for safety stocks can be reduced by an operations strategy which:

Correct AnswerverifiedShow Answer

For the economic order quantity, what are average weekly carrying costs?

Correct AnswerverifiedShow Answer

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D

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