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Exam 20: Inventory Management

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Question 31

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Which of the following is usually included as an inventory holding cost?

A) Order placing
B) Breakage
C) Typing up an order
D) Quantity discounts
E) Annualized cost of materials

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Question 32

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Fixed-order-quantity inventory models are "event triggered."

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Question 33

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Which of the following is a perpetual system for inventory management?

Assuming no safety stock, what is the reorder point (R) given an average daily demand of 100 units and a lead time of 5 days? __________________________________.

In a price-break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to calculate the economic order quantity for each possible price and to check to see whether the lowest cost quantity is feasible.

If it takes a supplier 10 days to deliver an order once it has been placed and the standard deviation of daily demand is 14, what is the standard deviation of usage during lead time? _________________________________________.

In inventory models, high holding costs tend to favor high inventory levels.

The fixed-time-period inventory system has a smaller average inventory than the fixed-order-quantity system because it must also protect against stock outs during the review period when inventory is checked.

The Pareto principle is best applied to which of the following inventory systems?

The computation of a firm's inventory position is found by taking the inventory on hand and adding it to the on-order inventory, and then subtracting backordered inventory.

The key difference between a fixed-order-quantity inventory model where demand is known and one where demand is uncertain is in computing the reorder point.

Using the probability approach to determine an inventory safety stock and wanting to be 95 percent sure of covering inventory demand, which of the following is the number of standard deviations necessary to have the 95 percent service probability assured?

Using the fixed-time-period inventory model, and given an average daily demand of 75 units, 10 days between inventory reviews, 2 days for lead time, 50 units of inventory on hand, a service probability of 95 percent, and a standard deviation of demand over the review and lead time of 8 units, which of the following is the order quantity?

Computer inventory systems are often programmed to produce a cycle count notice in which of the following case?

One of the daily, delicate balancing acts that logistics managers have to perform involves the trade-off between transportation costs and fulfillment speed.

Which of the following are the recommended percentage groupings of the ABC classifications of the dollar volume of products?

A company has recorded the last six days of daily demand on a single product it sells.Those values are 37, 115, 93, 112, 73, and 110.The time from when an order is placed to when it arrives at the company from its vendor is 3 days.Assuming the basic fixed-order-quantity inventory model fits this situation and no safety stock is needed, which of the following is the reorder point (R) ?

The fixed-order-quantity inventory model favors less expensive items because average inventory is lower.

Which of the following is a fixed-order-quantity inventory model?

Using the fixed-time-period inventory model, and given an average daily demand of 300 units, 4 days between inventory reviews, 5 days for lead time, 1,200 units of inventory on hand, a z of 1.96, and a standard deviation of demand over the review and lead time of 12 units, what quantity should be ordered? ________________________.