chapter 12 example #41182

9 April 2023
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question
Which of the following does NOT belong to ordering‚Äč costs? A. clerical support B. order processing C. interest payments D. cost of supplies
answer
c. interest payments
question
One use of inventory is A. to tightly synchronize a‚Äč firm's production with its‚Äč customers' demand. B. to ensure that item cost is maximized. C. to provide a hedge against inflation. D. to tightly synchronize production and distribution processes.
answer
C. to provide a hedge against inflation
question
What is a system for ordering items that have little or no value at the end of a sales‚Äč period? A. production order quantity model B. EOQ C. single-period inventory model D. ROP
answer
C. single-period inventory model
question
What is the cost to prepare a machine or process for‚Äč production? A. holding cost B. preparation cost C. setup cost D. ordering cost
answer
c. setup cost
question
Which of the following is NOT a type of‚Äč inventory? A. finished goods B. raw material C. work-in-process D. MRP
answer
d. MRP
question
A system that triggers ordering on a uniform time basis is called A. a‚Äč fixed-quantity system. B. an EOQ system. C. a reorder point system. D. a‚Äč fixed-period system.
answer
D. a‚Äč fixed-period system.
question
For seasonal‚Äč products, the service level should be set to equal A. overage cost‚Äč / (overage cost minus shortage‚Äč cost). B. shortage cost‚Äč / (overage cost minus shortage‚Äč cost). C. shortage cost‚Äč / (overage cost‚Äč + shortage‚Äč cost). D. overage cost‚Äč / (overage cost‚Äč + shortage‚Äč cost).
answer
C. shortage cost‚Äč / (overage cost‚Äč + shortage‚Äč cost).
question
ABC analysis divides an‚Äč organization's on-hand inventory into three classes based upon A. annual dollar volume. B. unit price. C. annual demand. D. the number of units on hand.
answer
A. annual dollar volume.
question
A statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution is referred as A. a quantity discount model. B. a robust model. C. a probabilistic model. D. the EOQ.
answer
C. a probabilistic model.
question
Which of the following does NOT belong to holding‚Äč costs? A. insurance on inventory B. order processing C. storage costs D. pilferage, scrap, and obsolescence
answer
B. Order processing
question
Which of the following types of inventory describes inventory that has been purchased but not‚Äč processed? A. raw material inventory B. ‚Äčwork-in-process inventory C. ‚Äčmaintenance/repair/operating supply inventory D. ‚Äčfinished-goods inventory
answer
a. raw material inventory
question
The appropriate level of safety stock is typically determined by A. minimizing the expected stockout cost. B. choosing the level of safety stock that assures a given service level. C. taking the square root of the economic order quantity. D. carrying sufficient safety stock so as to eliminate all stockouts.
answer
B. choosing the level of safety stock that assures a given service level.
question
Inventory control models assume that demand for an item is A. always independent on the demand for other items. B. identical to the demand for other items. C. either independent of or dependent on the demand for other items. D. always dependent on the demand for other items.
answer
c. either independent of or dependent on the demand for other items.
question
In the‚Äč single-period inventory‚Äč model, the overage cost is A. cost per unit minus sales price per unit. B. cost per unit minus salvage value per unit. C. sales price per unit minus cost per unit. D. salvage value per unit.
answer
B. cost per unit minus salvage value per unit.
question
A‚Äč single-period inventory model is NOT applicable for A. furniture. B. milk. C. newspapers. D. seasonal goods.
answer
a. furniture
question
The objective of inventory management is to A. strike a balance between inventory investment and customer service. B. decouple various parts of the production process. C. take advantage of quantity discounts. D. provide a selection of goods for anticipated customer demand.
answer
A. strike a balance between inventory investment and customer service.
question
Inventory record accuracy would be decreased by A. reorder points. B. cycle counting. C. ABC analysis. D. increasing stockroom accessibility.
answer
d. increasing stockroom accessibility
question
A system that keeps track of each withdrawal or addition to inventory continuously is A. a continuous inventory system. B. a constant monitoring system. C. a fixed period system. D. a perpetual inventory system.
answer
D. a perpetual inventory system.