Ops Chapter 9

The production demand for widgets for a​ 250-workday year is​ 7,500 units. Ordering costs are​ $25.00 per order and holding costs are​ $9.00 per unit per year. Four days must be allowed between order placement and order receipt. What is the​ EOQ, assuming known and constant​ variables? A. 204 B. 616 C. 73 D. 0.24

A. 204

Which of the following can put pressure on a company to carry small levels of​ inventory? A. high cost of capital B. the need to increase workforce productivity C. the potential for stockouts and backorders D. high ordering cost

A. high cost of capital

What is the primary lever to reduce cycle​ inventory? A. reduce the lot sizes B. improve demand forecasts C. place orders closer to the time when they must be received D. use flexible automation

A. reduce the lot sizes

Lewis Machine Tools is considering reducing lot size to reduce cycle inventory. Which of the following is a change that should be made for lot size reduction to be​ effective? A. Increase lead times B. Increasing repeatability C. Offer seasonal pricing plans D. Allowing backorders

B. Increasing repeatability

Which of the following is NOT considered a pressure to hold large​ inventories? A. the potential to reduce stockouts B. the cost of insurance C. the need to increase machine utilization D. the cost of placing an order

B. the cost of insurance

An individual item or product that has an identifying code and is held in inventory somewhere along the supply chain is called a A. stockable unit. B. ​stock-keeping unit. C. MRO. D. inventory item.

B. ​stock-keeping unit.

Which of the following costs is NOT considered an inventory holding​ (or carrying)​ cost? A. inventory shrinkage costs B. inventory handling costs C. inventory transportation costs D. inventory storage costs

C. inventory transportation costs

The primary lever to reduce anticipation inventory is to A. streamline the methods for placing orders and making setups. B. improve demand forecasts so that fewer surprises come from customers. C. match demand rate with production rate. D. rely on more equipment and labor buffers.

C. match demand rate with production rate.

​_________ items, consisting of raw materials and​ work-in-process inventories, are those items whose required quantity varies with the production plans for other items held in the​ firm's inventory. A. MRO B. Independent demand C. Cycle stock C. dependent demand

C. dependent demand

Lisa's Card Cache uses ABC analysis. Which of the following statements is NOT true of ABC​ analysis? A. ​Generally, the Class A items account for approximately 80 percent of the dollar usage. B. ABC analysis uses the Pareto chart concept. C. Inventory items are ranked on the basis of dollar usage. D. ABC analysis allows the company to control inventory shrinkage.

D. ABC analysis allows the company to control inventory shrinkage.

A perpetual inventory system requires that A. inventory is always in stock. B. inventory is constantly being produced. C. inventory is always on order. D. inventory records are always current.

D. inventory records are always current.

A form of shrinkage called​ ________ occurs when inventory cannot be used or sold at full​ value, owing to model​ changes, engineering​ modifications, or unexpectedly low demand. A. pilferage B. ​life-cycle shrink C. deterioration D. obsolescence

D. obsolescence