Question 1

Some inventory situations involve placing orders to cover only one demand period or to cover short-lived items at frequent intervals.

Accepted Answer

A) True 
 B)False

Question 2

Fixed-time period inventory models generate order quantities that vary from time period to time period,depending on the usage rate.

Accepted Answer

A) True 
 B)False

Question 3

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10,which of the following is the standard deviation of usage during lead time?

Accepted Answer

A)  10
B)  20
C)  40
D)  100
E)  400

Question 4

One of the drivers of the direct-to-store (direct distribution)approach is the upstream migration of value-added logistics services.

Accepted Answer

A) True 
 B)False

Question 5

Price-break models deal with the fact that the selling price of an item generally increases as the order size increases.

Accepted Answer

A) True 
 B)False

Question 6

The key difference between a fixed-order quantity inventory model where demand is known and one where demand is uncertain is in computing the reorder point.

Accepted Answer

A) True 
 B)False

Question 7

When stocked items are sold,the optimal inventory decision using marginal analysis is to stock that quantity where the probable profit from the sale or use of the last unit is equal to or greater than the probable losses if the last unit remains unsold.

Accepted Answer

A) True 
 B)False

Question 8

One of the drivers of the direct-to-store (direct distribution)approach is the decrease in trucking industry regulation.

Accepted Answer

A) True 
 B)False

Question 9

The "sawtooth effect," named after turn-around artist Al "Chainsaw" Dunlap,is the severe reduction of inventory and service levels that occurs when a firm has gone through a hostile takeover.

Accepted Answer

A) True 
 B)False

Question 10

Computer inventory systems are often programmed to produce a cycle count notice in which of the following case?

Accepted Answer

A)  When the record shows a near maximum balance on hand
B)  When the record shows positive balance but a backorder was written
C)  When quality problems have been discovered with the item
D)  When the item has become obsolete
E)  When the item has been misplaced in the stockroom

Question 11

You should visualize inventory as stacks of money sitting on forklifts,on shelves,and in trucks and planes while in transit.

Accepted Answer

A) True 
 B)False

Question 12

The fixed-order quantity inventory model favors less expensive items because average inventory is lower.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following are fixed-order quantity inventory models?

Accepted Answer

A)  Economic order quantity model
B)  The ABC model
C)  Periodic replenishment model
D)  Cycle counting model
E)  P model

Question 14

Using the probability approach we assume that the demand over a period of time is normally distributed.

Accepted Answer

A) True 
 B)False

Question 15

Fixed-time period inventory models are "time triggered."

Accepted Answer

A) True 
 B)False

Question 16

Fixed-order quantity inventory models are "event triggered."

Accepted Answer

A) True 
 B)False

Question 17

Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit change.

Accepted Answer

A) True 
 B)False

Question 18

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

Accepted Answer

A) True 
 B)False

Question 19

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Accepted Answer

A)  Ordering or setup costs are constant
B)  Inventory holding cost is based on average inventory
C)  Diminishing returns to scale of holding inventory
D)  Lead time is constant
E)  Demand for the product is uniform throughout the period

Exam 11: Inventory Management

You should visualize inventory as stacks of money sitting on forklifts,on shelves,and in trucks and planes while in transit.

Correct AnswerverifiedShow Answer

Using the probability approach we assume that the demand over a period of time is normally distributed.

Correct AnswerverifiedShow Answer

Fixed-time period inventory models generate order quantities that vary from time period to time period,depending on the usage rate.

Correct AnswerverifiedShow Answer

Some inventory situations involve placing orders to cover only one demand period or to cover short-lived items at frequent intervals.

Correct AnswerverifiedShow Answer

One of the drivers of the direct-to-store (direct distribution)approach is the decrease in trucking industry regulation.

Correct AnswerverifiedShow Answer

Which of the following are fixed-order quantity inventory models?

Correct AnswerverifiedShow Answer

Fixed-time period inventory models are "time triggered."

Correct AnswerverifiedShow Answer

When stocked items are sold,the optimal inventory decision using marginal analysis is to stock that quantity where the probable profit from the sale or use of the last unit is equal to or greater than the probable losses if the last unit remains unsold.

Correct AnswerverifiedShow Answer

Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit change.

Correct AnswerverifiedShow Answer

The key difference between a fixed-order quantity inventory model where demand is known and one where demand is uncertain is in computing the reorder point.

Correct AnswerverifiedShow Answer

If it takes a supplier four days to deliver an order once it has been placed and the standard deviation of daily demand is 10,which of the following is the standard deviation of usage during lead time?

Correct AnswerverifiedShow Answer

Price-break models deal with the fact that the selling price of an item generally increases as the order size increases.

Correct AnswerverifiedShow Answer

One of the drivers of the direct-to-store (direct distribution)approach is the upstream migration of value-added logistics services.

Correct AnswerverifiedShow Answer

Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Correct AnswerverifiedShow Answer

The fixed-order quantity inventory model favors less expensive items because average inventory is lower.

Correct AnswerverifiedShow Answer

The "sawtooth effect," named after turn-around artist Al "Chainsaw" Dunlap,is the severe reduction of inventory and service levels that occurs when a firm has gone through a hostile takeover.

Correct AnswerverifiedShow Answer

Computer inventory systems are often programmed to produce a cycle count notice in which of the following case?

Correct AnswerverifiedShow Answer

Safety stock can be defined as the amount of inventory carried in addition to the expected demand.

Correct AnswerverifiedShow Answer

Fixed-order quantity inventory models are "event triggered."

Correct AnswerverifiedShow Answer

One of the basic purposes of inventory analysis in manufacturing and stockkeeping services is to determine how large the orders to vendors should be.

Correct AnswerverifiedShow Answer

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