Supply Chain Test 3
Consider the quantity discount schedule below. Which of the following sets of order quantities is guaranteed to contain the optimal solution?
(4082, 6000, 8000)
A local club is selling Christmas trees and deciding how many to stock for the month of December. If demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $20, and trees sell for $50 what is the service level
.6
What is the difference between P and Q inventory systems?
A and B
Which of the following statements about ABC analysis is False?
ABC analysis is based on the presumption that all items
All except which of the following statements about ABC analysis are true
ABC analysis suggests that all items require the same high degree of control
If demand is not uniform and constant, then stockout risks can be controlled by
Adding safety stock
Which of these statements about production order quantity model is false
All else equal, the smaller the ratio of demand rate to production rate, the larger is the production of the order quantity
Which of the following statements regarding the reorder point is TRUE?
All of the above are true
Which of the following statements about the basic EOQ model is true?
All of the above statements are true
Service level is
B and D
If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock
Cannot be determined without lead time data
Which of the following items is most likely managed using a single-period order model
Christmas trees
Which of the following statements regarding control of service inventories is TRUE
Effective control of all goods leaving the facility is one applicable technique
Cycle counting
Eliminates annual inventory adjustments
Which of the following statements about the basic EOQ model is FALSE?
If annual demand were double, the EOQ would also double
In the basic EOQ model, if the costs of placing an order doubles and all other values remain constant, the EOQ will
Increase by about 41%
Which of the following statements regarding the production order quantity model is TRUE
It relaxes the assumption that all the order quantity is received at one time
Which of the following is a requirement of Q systems?
Perpertual inventory system
Which of the following statements regarding Amazon.com is FALSE?
The company was founded as, and still is, a "virtual" retailer with no inventory
Which of the following statements about quantity discounts is false?
The larger the annual demand, the less attractive a discount schedule will be
An advantage of the fixed period inventory system is that
There is no physical count of inventory items when an item is withdrawn
The two most basic inventory questions answered by the typical inventory model are
Timing of orders and order quantity
Which of the following would NOT generally be a motive for a firm to hold inventories
To minimize holding costs
The purpose of safety stock is to
control the likelihood of a stockout due to the variability of demand during lead time
Q is to ___________ systems as P is to _____________ systems
fixed quantity, fixed period
A product whose EOQ is 400 units experiences a 50% increase in demand. The new EOQ is:
increased by less than 50%
The main trait of a single period model is that
inventory has limited value after a certain period of time
When quantity discounts are allowed, the cost-minimizing order quantity
minimizes the sum of holding, ordering, and product costs
A product whose EOQ is 40 units experiences a decrease in ordering costs from $90 per order to $10 per order. the revised EOQ is:
one third as large
Most inventory models attempt to minimize
total inventory based costs
Suppose that papers for a newspaper stand cost .4 and sell for .8. they currently have no salvage value. If the stand owner is able to find an outlet that would provide a salvage value of .1, what would be the increase in service level
.07
A certain type of computer costs $1,000, and the annual holding cost is 25% of the value of the item. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?
110
If daily demand is normally distributed with a mean of 15 and standard deviation of 5, and lead time is constant at 4 days, 90 percent service level will require safety stock of approximately
13 units
In the basic EOQ model, if D=6000 per year, S=$100, and holding costs = $5 per unit per month, what is the EOQ?
141
In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. What is the standard deviation of demand during lead time
154 units
The assumptions of the production order quantity model are met in a situation where annual demand is 3650 units, setup cost is $50, holding cost is $12 unit per year, the daily demand rate is 10 and the daily production rate is 100. What is the production order quantity for this problem?
184
A product that has a demand of 4000 units per year. ordering costs of 20$ and holding cost is 4$ per unit per year. the cost minimizing solution for this product is to order
200 units per order
A production order quantity problem has a daily demand rate = 10 and a daily production rate = 50. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem
245
For a certain item, the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600. The inventory carrying cost per unit per year for this item is a. $1.50 b. $2.00 c. $3.00 d. $150.00 e. not enough data to determine
3.00
A specific product has demand during lead time of 100 units, with a standard deviation of 25 units. What safety stock (approximately) provides a 95% service level?
41
If daily demand is constant at 10 units per day, and lead time averages 12 days with a standard deviation of 3 days, 95 percent service requires a safety stock of approximately
49 units
A bakery wants to determine how many trays of doughnuts it should prepare each day. Demand is normal with a mean of 5 trays and standard deviation of 1 tray. If the owner wants a service level of at least 95%, how many trays should he prepare (rounded to the nearest whole tray)? Assume doughnuts have no salvage value after the day is complete.
7
A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The EOQ model is appropriate. The cost minimizing solution for this product will cost __________ per year in total annual inventory costs.
800
Which of the following is an element of inventory holding costs
All of the above are elements of inventory holding costs
Which of the following is a function of inventory
All of the above are functions of inventory.
Among the advantages of cycle counting is that
Allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory
ABC analysis divides on hand inventory into 3 classes, generally based upon which of the following?
Annual dollar volume
An inventory decision rule states, "When the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is TRUE?
Fourteen is the reorder point, and 100 is the order quantity
Which category of inventory holding costs has a much higher percentage than average for rapid change industries such as PCs and cell phones
Pilferage, scrap, and obsolescense
Which of the following is not one of the four main types of inventory
Safety Stock Inventory
Which of the following should be higher in P systems than Q systems
Safety stock
The proper quantity of safety stock is typically determined by
Setting the level of safety stock so that a given stockout risk is not exceeded
The fixed-period inventory system requires more safety stock than a fixed-quantity system because:
a stockout can occur during the review period as well as during the lead time.
Demand for dishwasher water pumps is 8 per day. The standard deviation of demand is 3 per day, and the order lead time is four days. The service level is 95%. What should the reorder point be?
more than 40
A disadvantage of the fixed-period inventory system is that:
since there is no count of inventory during the review period, a stockout is possible.
ABC analysis is based upon the principle that
there are usually a few critical items, and many items that are less critical