ISDS 3115 CH 12 study plan concepts

Which of the following statements is NOT true about a​ fixed-period system? A. A​ fixed-period system is also called​ "continuous review." B. The advantage of the​ fixed-period system is that there is no physical count of inventory items after an item is withdrawn. C. 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. 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. A​ fixed-period system is also called​ "continuous review."

Which of the following is NOT one of the assumptions of​ fixed-period systems? A. Lead times are variable. B. Items are independent of one another. C. Lead times are known. D. The only relevant costs are the ordering and holding costs.

A. Lead times are variable.

A system that triggers ordering on a uniform time basis is called A. a​ fixed-period system. B. a​ fixed-quantity system. C. an EOQ system. D. a reorder point system.

A. a​ fixed-period system.

Which of the following types of inventory describes inventory that has been purchased but not​ processed? A. raw material inventory B. finished-goods inventory C. work-in-process inventory D. maintenance/repair/operating supply inventory

A. raw material inventory

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

A. strike a balance between inventory investment and customer service.

A​ single-period inventory model is NOT applicable for A. milk. B. furniture. C. seasonal goods. D. newspapers.

B. furniture.

Which of the following does NOT belong to ordering​ costs? A. order processing B. interest payments C. cost of supplies D. clerical support

B. interest payments

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. either independent of or dependent on the demand for other items. D. always independent on the demand for other items.

C. either independent of or dependent on the demand for other items.

Policies based on ABC analysis might include investing A. extra care in forecasting for C items. B. more in inventory security for C items. C. more in supplier development for A items. D. the most time and effort verifying the accuracy of records for B items.

C. more in supplier development for A items.

Which of the following does NOT belong to holding​ costs? A. insurance on inventory B. storage costs C. order processing D. pilferage, scrap, and obsolescence

C. order processing

What is the cost to prepare a machine or process for​ production? A. preparation cost B. holding cost C. setup cost D. ordering cost

C. setup cost

What is a system for ordering items that have little or no value at the end of a sales​ period? A. EOQ B. production order quantity model C. single-period inventory model D. ROP

C. single-period inventory model

Which of the following is NOT a type of​ inventory? A. work-in-process B. finished goods C. raw material D. MRP

D. MRP

A system that keeps track of each withdrawal or addition to inventory continuously is A. a constant monitoring system. B. a fixed period system. C. a continuous inventory system. D. a perpetual inventory system.

D. a perpetual inventory system.

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.

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.

D. to provide a hedge against inflation.