Chapter9

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?

204

Lisa's Card Catche uses ABC analysis. Which of the following statements is NOT true of ABC analysis?

ABC analysis allows the company to control inventory shrinkage

Matching the demand rate with the production rate is a primary lever to reduce

Anticipation inventory

______ items, Is consisting of raw material 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

Dependent demand

Which of the following can put pressure on a company to carry small levels of inventory?

High cost of capital

Lewis Machine Tools is considering reducing lot size to reduce size to reduce cycle inventory. Which of the following is a change that should be made for the lot size reduction to be effective?

Increase repeatability

A perpetual inventory system requires that

Inventory records are always current

Which of the following cost is not considered an inventory holding or carrying cost?

Inventory transportation costs

The primary lever to reduce anticipation inventory is to

Match demand rate with production rate

A form of shrinkage called ______ occurs when inventory cannot be used or sold as full value, owing in model changes comment engineering modification, or unexpected low demand.

Obsolescence

An individual item or product that has an identifying code and and is held in inventory somewhere along the supply chain is called a

Stock-keeping unit

Which of the following is NOT considered a pressure to hold large inventories?

The cost of insurance