SCM chapter 4 - clicker questions and quiz STUDY

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

Base Stock Level System

The lowest inventory level at which a new order must be placed to avoid a stockout is known as the Replenishment Threshold

False

There are no inventories in the service industry.

False

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 Stock

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 primary purpose of the basic economic order quantity model is

To minimize the sum of ordering cost and holding cost

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

To minimize the sum of ordering cost and holding cost

The Economic Order Quantity (EOQ) is the optimal order size because it minimizes the annual total inventory cost.

True

The four broad categories of inventory are raw materials, work-in-process, MRO, and finished goods

True

The top 2 primary functions of inventory are (1) Buffer against uncertainty in the marketplace (2) Decouple dependencies in the supply chain.

True