Which of the following is not one of the assumptions of the basic EOQ model? | Quantity discounts are available |
Which of the following interactions with vendors would potentially lead to inventory reductions? | Reducing lead times |
Dairy items, fresh fruit and newspapers are items that: | Subject to determination and spoilage |
Which of the following is least likely to be included in order costs? | Temporary storage of delivered goods |
In an A-B-C system, the typical percentage of the number of items in inventory for A items is about: | 10 |
In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a | C items |
In the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few | A items |
The EOQ model is most relevant for which one of the following? | Determining fixed order quantities |
In a supermarket, a vendor’s restocking the shelves every Monday morning is an example of: | Fixed Order interval |
In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will: | Remain the same because EOQ is about how much to order, not when to order |
Which one of the following is not generally a determinant of the reorder point? | Purchase Cost |
If no variations in demand or lead time exist, the ROP will equal: | Expected usage during lead time because R=dL |
Which one of the following is implied by a "lead time" service level of 95 percent? | The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time |
All of the following are possible reasons for using the fixed order interval model except: | The required safety stock is lower than with an EOQ/ROP model |
Which of these products would be most apt to involve the use of a single-period model? | Fresh fish |
The management of supply chain inventories focuses on: | both internal and external inventories |
An operations strategy for inventory management should work towards: | decreasing lot sizes |
An operations strategy which recognizes high carrying costs and reduces ordering costs will result in: | greatly decrease order quantities |
The need for safety stocks can be reduced by an operations strategy which: | decrease lead time variaility |
With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably | C items |
The fixed order interval model would be most likely to be used for this situation: | Grouping orders can save shipping costs |
Which one of these would not be a factor in determining the reorder point? | The EOQ |
Which of the following interactions with vendors would potentially lead to inventory reductions? | Reduce lead times |
A non-linear cost related to order size is the cost of: | Receiving |
In a two-bin inventory system, the amount contained in the second bin is equal to the: | ROP |
When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves: | Do not line up |
Dairy items, fresh fruit and newspapers are items that: | Are subject to deterioration and spoilage |
Which of the following is least likely to be included in order costs? | Temporary storage of delivered goods |
The purpose of "cycle counting" is to: | reduce discrepancies between inventory records and actual |
The EOQ model is most relevant for which one of the following? | Determining fixed order quantaties |
Which is not a true assumption in the EOQ model? | No more than 3 items are involved |
In a supermarket, a vendor’s restocking the shelves every Monday morning is an example of: | Fixed order interval |
A cycle count program will usually require that ‘A’ items be counted: | More frequently than annually |
A risk avoider would want ______ safety stock | More |
In the basic EOQ model, if annual demand doubles, the effect on the EOQ is: | It increases by about 40 percent |
In the basic EOQ model, if lead time increases from five to 10 days, the EOQ will: | Remain the same |
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: | 20 Square root 2540]/[1]=20 |
In the basic EOQ model, if D = 60 per month, S = $12, and H = $10 per unit per month, EOQ is | 12 Square Root [21260]/[10]=12 |
In the basic EOQ model, if annual demand is 50, carrying cost is $2, and ordering cost is $15, EOQ is approximately: | Square Root [25015]/[2]=27.386 |
Which of the following is not true for Economic Production Quantity model? | There are no ordering set up costs |
Given the same demand, setup/ordering costs, and carrying costs, the EOQ calculated using incremental replenishment will be ____________ if instantaneous replenishment was assumed: | Greater than the EOQ |
The introduction of quantity discounts will cause the optimum order quantity to be | Unchanged or greater |
A fill rate is the percentage of _____ filled by stock on hand | Demand |
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 | Be in a feasible range |
Which one of the following is not generally a determinant of the reorder point? | Purchase Cost |
If no variations in demand or lead time exist, the ROP will equal: | Expected usage during lead time |
If average demand for an inventory item is 200 units per day, lead time is three days, and safety stock is 100 units, the reorder point is: | 700 [200*3]+100=700 The ROP will be the safety stock added to the product of the demand rate and the lead time. |
Which one of the following is implied by a "lead time" service level of 95 percent? | The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time |
Which one of the following is implied by an "annual" service level of 95 percent? | None of the above |
Daily usage is exactly 60 gallons per day. Lead time is normally distributed with a mean of 10 days and a standard deviation of 2 days. What is the standard deviation of demand during lead time? | 60*2 The standard deviation of demand during lead time is the square root of squared demand times the squared standard deviation of lead time |
Lead time is exactly 20 days long. Daily demand is normally distributed with a mean of 10 gallons per day and a standard deviation of 2 gallons. What is the standard deviation of demand during lead time? | 2 times the square root of 20 The standard deviation of demand during lead time equals the daily standard deviation of demand times the square root of the lead time. |
All of the following are possible reasons for using the fixed order interval model except: | The required safety stock is lower than with an EOQ/ROP model |
Which of these products would be most apt to involve the use of a single-period model? | fresh fish |
In a single-period model, if shortage and excess costs are equal, then the optimum service level is: | .50 The ratio of shortage cost to shortage plus excess cost is 0.5. |
In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent. | 80 The ratio of shortage cost to shortage plus excess cost is .8 |
In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent | 67 |
If, in a single-period inventory situation, the probabilities of demand being 1, 2, 3, or 4 units are .3, .3, .2, and .2, respectively. If two units are stocked, what is the probability of selling both of them? | .7 both units will be sold of demand is for 2,3,4 units |
The management of supply chain inventories focuses on: | Both external and internal inventories |
Cycle stock inventory is intended to deal with ________. | Expected demand |
An operations strategy which recognizes high carrying costs and reduces ordering costs will result in: | Greatly decrease order quantaties |
The need for safety stocks can be reduced by an operations strategy which: | Decrease lead time and variability |
If average demand for an item is 20 units per day, safety stock is 50 units, and lead time is four days, the ROP will be: | 130 [20*4]+50=130 Multiply the demand rate by the lead time and add the safety stock |
With an A-B-C system, an item that had a high demand but a low annual dollar volume would probably be classified as: | C Low dollar volume items tend to be classified as C items. |
The fixed order interval model would be most likely to be used for this situation | Grouping orders can save shipping costs |
Which item would be least likely to be ordered under a fixed order interval system? | Auto parts at an assembly plant |
Which one of these would not be a factor in determining the reorder point? | the EOQ |