SCM 186: Chapter 12 Inventory Connect

Which of the following is NOT one of the assumptions of​ fixed-period systems?

*A. Lead times are variable.* B. The only relevant costs are the ordering and holding costs. C. Items are independent of one another. D. Lead times are known.

A​ single-period inventory model is NOT applicable for

*A. furniture.* B. milk. C. newspapers. D. seasonal goods.

Which of the following does NOT belong to holding​ costs?

*A. order processing* B. insurance on inventory C. storage costs D. pilferage, scrap, and obsolescence

Which of the following statements is NOT true about a​ fixed-period system?

A. The advantage of the​ fixed-period system is that there is no physical count of inventory items after an item is withdrawn. B. A​ fixed-period system is appropriate when vendors make routine visits to customers to take fresh orders or when purchasers want to combine orders to save ordering and transportation costs. *C. A​ fixed-period system is also called​ "continuous review."* D. The disadvantage of the​ fixed-period system is that because there is no tally of inventory during the review​ period, there is the possibility of a stockout during this time.

A system that keeps track of each withdrawal or addition to inventory continuously is

A. a constant monitoring system. B. a continuous inventory system. *C. a perpetual inventory system.* D. a fixed period system.

Inventory control models assume that demand for an item is

A. always dependent on the demand for other items. B. identical to the demand for other items. C. always independent on the demand for other items. *D. either independent of or dependent on the demand for other items.*

A system that triggers ordering on a uniform time basis is called

A. an EOQ system. *B. a​ fixed-period system.* C. a​ fixed-quantity system. D. a reorder point system.

Which of the following does NOT belong to ordering​ costs?

A. clerical support *B. interest payments* C. order processing D. cost of supplies

Which of the following types of inventory describes inventory that has been purchased but not​ processed?

A. finished-goods inventory *B. raw material inventory* C. maintenance/repair/operating supply inventory D. work-in-process inventory

Cycle counting

A. involves shutting down production once per year to perform the annual inventory count. B. increases annual inventory adjustments. C. cannot be performed in an independent demand situation. *D. is a process by which inventory records are verified.*

What is the cost to prepare a machine or process for​ production?

A. ordering cost B. holding cost C. preparation cost *D. setup cost*

What is a system for ordering items that have little or no value at the end of a sales​ period?

A. production order quantity model B. ROP C. EOQ *D. single-period inventory model*

The objective of inventory management is to

A. provide a selection of goods for anticipated customer demand. B. decouple various parts of the production process. *C. strike a balance between inventory investment and customer service.* D. take advantage of quantity discounts.

ABC analysis divides an​ organization's on-hand inventory into three classes based upon

A. the number of units on hand. B. annual demand. C. unit price. *D. annual dollar volume.*

One use of inventory is

A. to tightly synchronize production and distribution processes. B. to ensure that item cost is maximized. C. to tightly synchronize a​ firm's production with its​ customers' demand. *D. to provide a hedge against inflation.*

Which of the following is NOT a type of​ inventory?

A. work-in-process *B. MRP* C. raw material D. finished goods