Distinguish between dependent and independent demand in a McDonald's restaurant, in an integrated manufacturer of personal copiers, and in a pharmaceutical supply house.
Distinguish between in-process inventory, safety stock inventory, and seasonal inventory.
Discuss the nature of the costs that affect inventory size.
Under which conditions would a plant manager elect to use a fixed–order quantity model as opposed to a fixed–time period model? What are the disadvantages of using a fixed–time period ordering system?
Discuss the general procedure for determining the order quantity when price breaks are involved. Would there be any differences in procedure if holding cost were a fixed percentage of price rather than a constant amount?
What two basic questions must be answered by an inventory-control decision rule?
Discuss the assumptions that are inherent in production setup cost, ordering cost, and carrying costs. How valid are they?
"The nice thing about inventory models is that you can pull one off the shelf and apply it so long as your cost estimates are accurate." Comment.
Which type of inventory system would you use in the following situations? a. Supplying your kitchen with fresh food. b. Obtaining a daily newspaper. c. Buying gas for your car.
To which of these items do you impute the highest stockout cost?
Why is it desirable to classify items into groups, as the ABC classification does?
What kind of policy or procedure would you recommend to improve the inventory operation in a department store? What advantages and disadvantages does your system have vis-à-vis the department store inventory operation described in this chapter?
