Supply Chain Quiz 4

The top 2 primary functions of inventory are....

1. To meet customer demand 2. To buffer against uncertainty in demand and/or supply.

A type of inventory system that issues an order whenever a withdrawal is made from inventory, is known as?

Base Stock Level System

Inventory costs which are independent of the output quantity are called?

Fixed Costs

Which inventory stock level is generally used for a very specific purpose or future event, and for a defined period of time?

Strategic shock

The primary purpose of the basic economic order quantity model is...

To minimize the sum of ordering cost and holding cost

Are there inventories in the service industry?

Yes

The Economic Order Quantity (EOQ) is the optimal order size....

because it minimizes the annual total inventory cost.

Replenishment Threshold

The lowest inventory level at which a new order must be placed to avoid a stockout.

Which of the following is NOT an example of an ordering cost for products purchased from a supplier?

The opportunity cost of not ordering from a least cost supplier

The four broad categories of inventory are...

1. raw materials 2. work-in-process 3. MRO 4. finished goods