A cycle count program will usually require that 'A' items be counted:
  • There are no ordering or setup costs.
  • It increases by about 40 percent.
  • decreases lead time variability
  • more frequently than annually
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
  • reduce lead times
  • be in a feasible range
  • unchanged or greater
Which one of the following is implied by an "annual" service level of 95 percent?
  • The annual service level is usually greater than the cycle service level, and thus the risk of a stockout during lead time is much smaller than 5 percent.
  • The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.
  • the EOQ
  • The perishability of fresh fish makes it more appropriate for a single-period model.
The introduction of quantity discounts will cause the optimum order quantity to be:
  • reduce lead times
  • unchanged or greater
  • expected usage during lead time
  • decreasing lot sizes
In a supermarket, a vendor's restocking the shelves every Monday morning is an example of:
  • fixed order interval
  • greatly decreased order quantities
  • determining fixed order quantities
  • remain the same
An operations strategy for inventory management should work towards:
  • decreases lead time variability
  • unchanged or greater
  • expected usage during lead time
  • decreasing lot sizes
When carrying costs are stated as a percentage of unit price, the minimum points on the total cost curves
  • purchase cost
  • reduce lead times
  • decreasing lot sizes
  • Do not line up
The purpose of "cycle counting" is to:
  • reduce discrepancies between inventory records and actual
  • decreases lead time variability
  • both internal and external inventories
  • reduce lead times
Dairy items, fresh fruit and newspapers are items that:
  • are subject to deterioration and spoilage
  • temporary storage of delivered goods
  • There are no ordering or setup costs.
  • No more than 3 items are involved
A risk avoider would want ______ safety stock.
  • the EOQ
  • No more than 3 items are involved
  • Demand
  • More
In the single-period model, if excess cost is double shortage cost, the approximate stockout risk, assuming an optimum service level, is ___ percent.
  • The ratio of shortage cost to shortage plus excess cost is 0.67.
  • The ratio of shortage cost to shortage plus excess cost is 0.5.
  • The ratio of shortage cost to shortage plus excess cost is 0.8.
  • The required safety stock is lower than with an EOQ/ROP model.
In the basic EOQ model, if annual demand doubles, the effect on the EOQ is:
  • decreases lead time variability
  • expected usage during lead time
  • remain the same
  • It increases by about 40 percent.
Which of the following is not true for Economic Production Quantity model?
  • Quantity discounts are available.
  • There are no ordering or setup costs.
  • reduce lead times
  • decreases lead time variability
In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.
  • The ratio of shortage cost to shortage plus excess cost is 0.5.
  • Both units will be sold if demand is for 2, 3 or 4 units.
  • The ratio of shortage cost to shortage plus excess cost is 0.8.
  • The required safety stock is lower than with an EOQ/ROP model.
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:
  • reduce lead times
  • greater than the EOQ
  • be in a feasible range
  • It increases by about 40 percent.
In the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few inventory items would be classified as:
  • C items
  • A items
  • receiving
  • ROP
Which one of these would not be a factor in determining the reorder point?
  • The annual service level is usually greater than the cycle service level, and thus the risk of a stockout during lead time is much smaller than 5 percent.
  • The probability is 95 percent that demand during lead time will not exceed the amount on hand at the beginning of lead time.
  • purchase cost
  • the EOQ
Which is not a true assumption in the EOQ model?
  • Quantity discounts are available.
  • temporary storage of delivered goods
  • both internal and external inventories
  • No more than 3 items are involved
In the A-B-C classification system, items which account for fifteen percent of the total dollar-volume for a majority of the inventory items would be classified as:
  • Grouping orders can save shipping costs.
  • A items
  • C items
  • C
A non-linear cost related to order size is the cost of:
  • ROP
  • A items
  • receiving
  • Grouping orders can save shipping costs.
The fixed order interval model would be most likely to be used for this situation:
  • ROP
  • Grouping orders can save shipping costs.
  • receiving
  • A items
Which one of the following is not generally a determinant of the reorder point?
  • purchase cost
  • There are no ordering or setup costs.
  • the EOQ
  • The annual service level is usually greater than the cycle service level, and thus the risk of a stockout during lead time is much smaller than 5 percent.
Which of the following is least likely to be included in order costs?
  • temporary storage of delivered goods
  • There are no ordering or setup costs.
  • No more than 3 items are involved
  • reduce lead times
The management of supply chain inventories focuses on:
  • more frequently than annually
  • It increases by about 40 percent.
  • No more than 3 items are involved
  • both internal and external inventories
A fill rate is the percentage of _____ filled by stock on hand
  • expected demand
  • Demand
  • temporary storage of delivered goods
  • decreasing lot sizes
An operations strategy which recognizes high carrying costs and reduces ordering costs will result in:
  • greatly decreased order quantities
  • fixed order interval
  • determining fixed order quantities
  • decreasing lot sizes
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?
  • The ratio of shortage cost to shortage plus excess cost is 0.8.
  • The ratio of shortage cost to shortage plus excess cost is 0.5.
  • The ratio of shortage cost to shortage plus excess cost is 0.67.
  • Both units will be sold if demand is for 2, 3 or 4 units.
Cycle stock inventory is intended to deal with ________.
  • reduce lead times
  • expected demand
  • more frequently than annually
  • expected usage during lead time
In a two-bin inventory system, the amount contained in the second bin is equal to the:
  • ROP
  • C
  • Grouping orders can save shipping costs.
  • A items
The need for safety stocks can be reduced by an operations strategy which:
  • decreases lead time variability
  • There are no ordering or setup costs.
  • decreasing lot sizes
  • It increases by about 40 percent.
If no variations in demand or lead time exist, the ROP will equal:
  • decreases lead time variability
  • expected usage during lead time
  • expected demand
  • decreasing lot sizes
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