(Chapter 14) Midterm Exam 2
As lead time for an item increases, the cycle time increases.
False
The time between placing orders is the lead time.
False
In the EOP (production) model, setup cost is not important
False think so
A model where demand is considered known and not subject to uncertainty is also known as Deterministic Inventory Model
True
Constant demand is a key assumption of the EOQ model.
True
In the EOQ model, the average inventory per cycle over many cycles is Q/2.
True
In the EOQ model, the objective function is to minimize total cost
True
When demand is independent, it is not related to demand for other components or items produced by thefirm.
True
For inventory systems with constant demand and a fixed lead time, a. the reorder point = lead-time demand. b. the reorder point > lead-time demand. c. the reorder point < lead-time demand. d. the reorder point is unrelated to lead-time demand
a. the reorder point = lead-time demand.
Inventory models in which the rate of demand is constant are called a. fixed models. b. deterministic models. c. JIT models. d. requirements models
b. deterministic models.
Which cost would not be considered part of a holding cost? a. cost of capital b. shipping cost c. insurance cost d. warehouse overhead
b. shipping cost
For the EOQ model, which of the following relationships is incorrect? a. As the order quantity increases, the number of orders placed annually decreases. b. As the order quantity increases, annual holding cost increases. c. As the order quantity increases, annual ordering cost increases. d. As the order quantity increases, average inventory increases.
c. As the order quantity increases, annual ordering cost increases.
The EOQ model a. determines only how frequently to order. b. considers total cost. c. minimizes both ordering and holding costs. d. All of the alternatives are correct
d. All of the alternatives are correct
Which of the following is not implied when average inventory is Q/2, where Q is the order quantity? a. An entire order quantity arrives at one time. b. The previous order quantity is entirely depleted when the next order arrives. c. An order quantity is depleted at a uniform rate over time. d. Backorders are permitted
d. Backorders are permitted
Holding cost is not dependent on holding rate.
idk
Ordering cost is not dependent on size of the order
idk
