Extra units that are held in inventory to reduce stockouts are called
  • setup cost
  • adding safety stock
  • safety stock
  • safety stock inventory
The difference between the basic EOQ model and the production order quantity model is that
  • the production order quantity model does not require the assumption of instantaneous delivery.
  • a fixed-period system
  • when to place an order and how many of an item to order.
  • The item has a constant purchase price.
Which of the following should be higher in P systems than Q systems?
  • lead times are variable
  • setup cost
  • Quantity discounts are possible.
  • Safety stock
Which of the following is NOT one of the assumptions of​ fixed-period systems?
  • The item has a constant purchase price.
  • lead times are variable
  • raw material inventory
  • Safety stock
The production order quantity model
  • ​single-period inventory model
  • a​ fixed-period system.
  • a perpetual inventory system.
  • is appropriate when units are produced and sold simultaneously.
A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution is referred as
  • a stockout is possible
  • safety stock inventory
  • a probabilistic model.
  • raw material inventory
ABC analysis divides an​ organization's on-hand inventory into three classes based upon
  • raw material inventory
  • adding safety stock
  • lead times are variable
  • annual dollar volume
What is a system for ordering items that have little or no value at the end of a sales​ period?
  • a​ fixed-period system.
  • ​single-period inventory model
  • is appropriate when units are produced and sold simultaneously.
  • The item has a constant purchase price.
The objective of inventory management is to
  • choosing the level of safety stock that assures a given service level.
  • is a process by which inventory records are verified for accuracy
  • shortage cost​ / (overage cost​ + shortage​ cost).
  • strike a balance between inventory investment and customer service.
If demand is not uniform and constant, the stockout risks can be controlled by __________.
  • lead times are variable
  • annual dollar volume
  • safety stock
  • adding safety stock
The appropriate level of safety stock is typically determined by
  • strike a balance between inventory investment and customer service.
  • shortage cost​ / (overage cost​ + shortage​ cost).
  • choosing the level of safety stock that assures a given service level.
  • will increase the cost of the inventory policy.
With a probabilistic​ model, increasing the service level
  • more in supplier development for A items
  • cost per unit - salvage value per unit.
  • will increase the cost of the inventory policy.
  • choosing the level of safety stock that assures a given service level.
Policies based on ABC analysis might include investing
  • more in supplier development for A items
  • more in supplier development for A items.
  • cost per unit - salvage value per unit.
  • total inventory based costs
For seasonal​ products, the service level should be set to equal
  • cost per unit - salvage value per unit.
  • increase the cost of the inventory policy
  • shortage cost​ / (overage cost​ + shortage​ cost).
  • choosing the level of safety stock that assures a given service level.
A system that triggers ordering on a uniform time basis is called
  • a fixed-period system
  • when to place an order and how many of an item to order.
  • the production order quantity model does not require the assumption of instantaneous delivery.
  • a perpetual inventory system.
The two most important inventory-based questions answered by the typical inventory model are
  • order processing
  • the production order quantity model does not require the assumption of instantaneous delivery.
  • a fixed-period system
  • when to place an order and how many of an item to order.
Which of these conditions is not necessary for the economic order quantity model to be valid?
  • The item has a constant purchase price.
  • raw material inventory
  • lead times are variable
  • Quantity discounts are possible.
Cycle counting
  • will increase the cost of the inventory policy.
  • is a process by which inventory records are verified.
  • is a process by which inventory records are verified for accuracy
  • to provide a hedge against inflation
Inventory management policies based on ABC analysis might include investing
  • increase the cost of the inventory policy
  • more in supplier development for A items
  • more in supplier development for A items.
  • increasing stockroom accessibility.
Which of the following is NOT one of the basic assumptions of the basic EOQ​ model?
  • Safety stock
  • lead times are variable
  • The item has a constant purchase price.
  • Quantity discounts are possible.
One use of inventory is __________.
  • to provide a hedge against inflation
  • increasing stockroom accessibility.
  • cost per unit - salvage value per unit.
  • is a process by which inventory records are verified for accuracy
Which of the following does NOT belong to holding​ costs?order proccessinginsurance on inventorypilferage, scrap
  • Safety stock
  • raw material inventory
  • order processing
  • the production order quantity model does not require the assumption of instantaneous delivery.
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