Ch 8

Which of the following statements about the lean approach and JIT is false?

. JIT tends to focus on product movement from manufacturer to retailer

Which of the following is not a component of ordering (order) costs?

. all are components of ordering (order) costs

Inventory turnover can be calculated by ____.

. dividing the cost of goods sold by average inventory

Inventory flow diagrams illustrate that safety stock can prevent two problem areas, ____ and ____.

. increased rate of demand; longer-than-normal replenishment

____ refers to stocks of goods and materials that are maintained for many purposes, the most common being to satisfy normal demand patterns.

. inventory

Inventory shrinkage ____.

. refers to the fact that more items are recorded entering than leaving warehousing facilities

Which of the following is not an assumption associated with the basic economic order quantity (EOQ) model?

. stockouts are permitted

The economic order quantity (EOQ) determines ____.

. the point at which carrying costs equal ordering costs

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

Inventory costs in the United States in the twenty-first century represent approximately ____ of total logistics costs

1/3

Inventory carrying costs in the United States in the twenty-first century have ranged between ____ and ____ percent

19;24

____ 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

. Which of the following is not a potential benefit to vendor-managed inventory?

ALL OF THE ABOVE

____ stock refers to inventory that is en route between various nodes in a logistics system

NONE OF THE ABOVE

. Each of the following is a component of inventory carrying cost except

accounting cost

. All of the following are suggestions for dealing with dead stock (inventory), except ____.

aggressive marketing b. donate to charities c. make to order d. throw it away ALL OF THE ABOVE ARE

. Under conditions of certainty, a reorder point is equal to ____.

average daily demand times the length of the replenishment cycle

____ stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

base

____ stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time

buffer

The economic order quantity (EOQ) deals with calculating the proper order size with respect to ____ costs and ____ costs.

carrying; ordering

Which of the following is not an example of a lean inventory approach

collaborative planning, forecasting, and replenishment

____ 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

Concerning the EOQ model, if demand or annual usage increases by 10%, then the EOQ will ____.

increase

____ 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

Concerning the EOQ model, if the ordering costs increase by 10% and the product value increases by 10%, then the EOQ will ____.

stay unchanged

____ products refer to those that customers view as being able to fill the same need or want as another product

substitute

Which of the following situations is likely the most damaging (costly) with respect to a stockout

the customer goes to a competitor for a purchase

All of the following statements are true, except:

the importance of individual carrying costs factors (categories) is generally consistent from product to product

33. Which of the following statements about service parts logistics is false?

the worldwide economic slowdown of 2008 and 2009 caused a decreased emphasis on service parts logistics

Dead inventory (dead stock) refers to a 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

Which of the following statements is false?

with respect to stockouts, a delayed sale is virtually costless to a company because of the customer's brand loyalty b. the higher the average cost for a stockout, the more inventory (safety stock) that should be held c. tradeoffs exist between carrying costs and stockout costs d. stockouts can be more costly than having too many items in stock ALL OF THE ABOVE ARE TRUE