Inventory True/False Chapter 11 & 13
False
In the EOQ formula holding cost under 10% are expressed as percentages, above 10% are expressed as annual unit cost
True
In the single-period model, the service level is the probability that demand will not exceed the sticking level in any period
False
The objective of invetory management is to minimize the cost of holding invetory
True
The overall objective of inventory management is to achieve satisfactory levels of costumer service while keeping inventory cost reasonable
False
The single-period model can be very helpful in determining how much to order
True
The two main concerns of inventory control relate to the cost and the level of customer service
False
A level capacity strategy is also known as a chase demand strategy
False
A retail store that carries twice the inventory as its competitor will provide twice the customer service level
True
A two-bin system is an example of a perpetual inventory system.
True
Aggregate planners commonly use trial and error methods in developing aggregate plans
True
Aggregate planning is used to establish general levels of employment, output, and inventories over an intermediate-range of time
False
An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier
False
Demand can be altered in aggregate planning by promotion and producing additional product using overtime.
False
In the single-period model, with discrete stocking levels, if the computed service level exactly equals a cumulative probability for a stocking level, there is only one optimal stocking level.
True
Monitoring inventory turns over time can be used as a measure of performance
True
One important use of inventors in manufacturing is to decouple operations through the use of work in process inventories
True
Perpetual inventory systems are supported by computer systems that are either batch or on-line
True
The EOQ and ROP models are appropriate if unused items can be carried over and used or sold in subsequent periods
True
The goal of a single period inventory model is to identify the order quantity that will minimize the shortage cost
True
The master schedule indicates the quality and timing for delivery of a product, but not the dates production will need to start
True
To provide satisfactory levels of customer while keeping inventory cost within reasonable bounds, two fundamental decisions must be made about inventory:the timing and size of orders
True
When excess cost is equal to shortage cost in the single period model the optimal stocking level falls in the center of the distribution
True
When the excess cost is equal to shortage cost in the single period model, the optimum stocking level falls in the center of the distribution.
True
When the item is a spare part for a production machine, shortage cost in the single period model refers to the cost of lost production
True
When the item is offered for resale, shortage cost in the single period model can include a charge for loss of customer goodwill
False
When the optimum stocking level does not coincide with a feasible stocking level in the single period model, one should round down so that excess cost will be reduced.