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| 1 | |
Which of the following is not a reason for carrying inventory? |
| | A) | to maintain independence of operations |
| | B) | to take advantage of economic purchase-order size |
| | C) | to make the system less productive |
| | D) | to meet variation in product demand |
| | E) | to allow flexibility in production scheduling |
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| 2 | |
Counting items to ensure an order is correct, is an example of: |
| | A) | Setup cost |
| | B) | ordering cost |
| | C) | carrying cost |
| | D) | stockout cost |
| | E) | holding cost |
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| 3 | |
Independent demand is: |
| | A) | inventory whose demand comes from independent suppliers |
| | B) | inventory that is independent of any known rules of demand and supply |
| | C) | demand that is related to the demand for another item |
| | D) | demand determined by the marketplace that requires forecasting |
| | E) | none of the above |
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| 4 | |
The basic difference between P and Q systems is: |
| | A) | Q models are event triggered while P models are time triggered |
| | B) | Q models are time triggered while P models are event triggered |
| | C) | P models favor more expensive items |
| | D) | P model is more appropriate for important items such as critical repair parts |
| | E) | None of the above |
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| 5 | |
Which of the following is not an assumption of the basic economic-order quantity model? |
| | A) | annual demand is constant and known |
| | B) | lead time is constant |
| | C) | ordering or setup costs are constant |
| | D) | quantity discounts are available |
| | E) | no backorders are allowed |
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| 6 | |
In the basic fixed-order quantity model, if annual demand doubles, the effect on the Optimal Order Quantity (EOQ) is: |
| | A) | it doubles |
| | B) | it is half its previous amount |
| | C) | it is about 70% of its previous amount |
| | D) | decreases by a factor of 2 |
| | E) | it increases by about 40% |
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| 7 | |
Which of the following statements is true about the Q-system? |
| | A) | It does not have a reorder point but rather a target inventory. |
| | B) | The system is completely determined by the two parameters, Q and R. |
| | C) | It does not have an EOQ, since the quantity varies according to demand. |
| | D) | The order interval is fixed not the order quantity. |
| | E) | None of the above is true. |
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| 8 | |
ABC analysis typically requires that inventory be classified according to: |
| | A) | alphabetical order by item name |
| | B) | annual dollar volume |
| | C) | alphabetical order by supplier name |
| | D) | due date |
| | E) | none of the above |
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| 9 | |
In the basic Q model, if the lead time doubles, the EOQ will: |
| | A) | decrease by half |
| | B) | double |
| | C) | remain the same |
| | D) | increase, but not double |
| | E) | none of the above |
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| 10 | |
Three simple inventory systems often used in practice are: |
| | A) | Optional replenishment or min/max system |
| | B) | One-bin system |
| | C) | Two-bin system |
| | D) | ABC inventory classification system |
| | E) | A, B, and C |
| | F) | A, C and D |
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