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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 | |
Fixed costs associated with checking a goods receipt corresponding to an order to ensure the receipt and order matches 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 periodic systems (P-model) and fixed-order quantity systems (Q-model) 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-models are 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) | Doubled |
| | B) | Half its previous amount |
| | C) | About 70% of its previous amount |
| | D) | Decreased by a factor of 2 |
| | E) | Increased by about 40% |
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| 7 | |
Which of the following statements is true about the fixed-order quantity 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 |
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| 11 | |
Cycle counting of inventory is most common for the following reasons except: |
| | A) | It is the appointed time of the year |
| | B) | Records show inventory is low or zero |
| | C) | Records show inventory but a backorder was written |
| | D) | Some inventory is very valuable or important |
| | E) | None of the above |
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