A) 7 units.
B) 10 units.
C) 13 units.
D) 16 units.
E) 26 units.
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A) increasing the EOQ.
B) placing an extra order.
C) raising the selling price to reduce demand.
D) adding safety stock.
E) reducing the reorder point.
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A) is always an EOQ quantity.
B) minimizes the sum of holding and ordering costs.
C) minimizes the unit purchase price.
D) may be a quantity below that at which one qualifies for that price.
E) minimizes the sum of holding, ordering, and product costs.
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Cycle counting is an...View Answer
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A) $400
B) $800
C) $1200
D) Zero; this is a class C item.
E) Cannot be determined because unit price is not known.
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A) three times as large.
B) one-third as large.
C) nine times as large.
D) one-ninth as large.
E) cannot be determined.
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A) ABC analysis is based on the presumption that controlling the few most important items produces the vast majority of inventory savings.
B) In ABC analysis, "A" Items are tightly controlled, have accurate records, and receive regular review by major decision makers.
C) In ABC analysis, "C" Items have minimal records, periodic review, and simple controls.
D) ABC analysis is based on the presumption that all items must be tightly controlled to produce important cost savings.
E) In ABC analysis, "B" items are not as tightly controlled as "A" items.
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A) is a process by which inventory records are verified once a year.
B) provides a measure of inventory accuracy.
C) provides a measure of inventory turnover.
D) assumes that all inventory records must be verified with the same frequency.
E) assumes that the most frequently used items must be counted more frequently.
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This problem requires formula 12-16 sinc...View Answer
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A) perpetual inventory system
B) constant order spacing
C) variable lead time
D) constant demand
E) periodic inventory system
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A) all items in inventory must be monitored very closely.
B) there are usually a few critical items, and many items which are less critical.
C) an item is critical if its usage is high.
D) more time should be spent on class "C" items because there are more of them.
E) as with grade distributions in many MBA courses, there should be more medium-level "B" items than either "A" or "C" items.
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A) The reorder point is that quantity that triggers an action to restock an item.
B) There is a reorder point even if lead time and demand during lead time are constant.
C) The reorder point is larger than d × L if safety stock is present.
D) The fixed-period model has no reorder point.
E) The re-order point is not determinable.
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This problem requires economic order qua...View Answer
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Typical components of inventor...View Answer
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A) The production order quantity model is appropriate when the assumptions of the basic EOQ model are met, except that receipt is noninstantaneous.
B) Because receipt is noninstantaneous, some units are used immediately, not stored in inventory.
C) Average inventory is less than one-half of the production order quantity.
D) All else equal, the smaller the ratio of demand rate to production rate, the larger is the production order quantity.
E) The production order quantity assumes units are produced and sold simultaneously.
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SS = 0.67 ∙ 6∙ SQRT ...View Answer
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A) It applies only to items produced in the firm's own production departments.
B) It relaxes the assumption that all the order quantity is received at one time.
C) It relaxes the assumption that the demand rate is constant.
D) It minimizes the total production costs.
E) It minimizes inventory.
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A) 8 units
B) 10 units
C) 16 units
D) 64 units
E) Cannot be determined without lead time data.
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