chapter 8
____ stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.
Buffer
Inventory costs in the United States in the twenty-first century represent approximately ____ of total logistics costs.
One-third
Concerning the EOQ model, if the ordering costs increase by 10% and the product value increases by 10%, then the EOQ will:
stay unchanged
The EOQ determines:
the point at which carrying costs equal ordering costs
Inventory carrying costs in the United States in the twenty-first century have ranged between ____ and ____ percent.
20; 25
____ recognizes that all inventories are not of equal value to a firm and thus all inventories should not be managed in the same way.
ABC analysis of inventory
____ stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle
Base
____ items refer to those that are used or distributed together.
Complementary
Holding high levels of inventory result in ____ inventory carrying costs and ____ stockout costs.
High; low
____ refers to stocks of goods and materials that are maintained for many purposes, the most common being to satisfy normal demand patterns.
Inventory
____ stock refers to inventory that is en route between various nodes in a logistics system.
Pipeline
____ stock is carried to stimulate demand.
Psychic
ABC analysis of inventory:
Recognizes that inventories are not of equal value to a firm
____ stock refers to inventory that is held for several reasons, to include seasonal demand, projected price increases, and potential shortages of product.
Speculative
____ products refer to products that customers view as being able to fill the same need or want as another product.
Substitute
In the United States, ____ has traditionally provided a convenient starting point when estimating the interest charges associated with maintaining inventory.
The prime rate of interest
Dead inventory (dead stock) refers to product for which there is no sales during a ____ month period.
Twelve
Under ____, the size and timing of replenishment orders are the responsibility of the manufacturer.
Vendor-Managed Inventory
Under conditions of certainty, a reorder point is equal to:
average daily demand in units times the length of the replenishment cycle
The economic order quantity (EOQ) deals with calculating the proper order size with respect to ____ costs and ____ costs.
carrying; ordering
Inventory turnover can be calculated by:
dividing the cost of goods sold by average inventory
Concerning the EOQ model, if demand or annual usage increases by 10%, then the EOQ will:
increase
Inventory flow diagrams illustrate that safety stock can prevent two problem areas, ____ and ____.
increased rate of demand; longer-than-normal replenishment
Inventory shrinkage:
refers to the fact that more items are recorded entering than leaving warehousing facilities
Each of the following is a component of inventory carrying cost except:
shrinkage cost