Question 1

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If order size was 1,000 kilograms of resin, what would be the length of an order cycle?

Accepted Answer

A)   .05 days
B)   4 days
C)   16 days
D)   20 days
E)   50 daysF) C) and D)
G) None of the above

Question 2

Which of these products would be most apt to involve the use of a single-period model?

Accepted Answer

A)   gold coins
B)   hammers
C)   fresh fish
D)   calculators
E)   frozen cornF) A) and D)
G) All of the above

Question 3

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

Accepted Answer

A)   100
B)   80
C)   60
D)   40
E)   20F) A) and D)
G) A) and E)

Question 4

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Accepted Answer

A) True 
 B)False

Question 5

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are possible reasons for using the fixed-order-interval model except:

Accepted Answer

A)   supplier policy encourages use.
B)   grouping orders can save in shipping costs.
C)   the required safety stock is lower than with an EOQ/ROP model.
D)   it is suited to periodic checks of inventory levels rather than continuous monitoring.
E)   continuous monitoring is not practical.F) A) and C)
G) A) and D)

Question 7

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Accepted Answer

A) True 
 B)False

Question 8

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average daily total inventory costs, EXCLUDING the cost of the resin?

Accepted Answer

A)   $5
B)   $10
C)   $20
D)   $25
E)   $40F) A) and E)
G) B) and E)

Exam 18: Inventory Management

Correct Answer
verified

All of the following are possible reasons for using the fixed-order-interval model except:

Correct Answer
verified

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Correct Answer
verified

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Correct Answer
verified

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Correct Answer
verified

Which of these products would be most apt to involve the use of a single-period model?

Correct Answer
verified

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

Correct Answer
verified

Correct Answer
verified

Exam 18: Inventory Management

Correct AnswerverifiedShow Answer

All of the following are possible reasons for using the fixed-order-interval model except:

Correct AnswerverifiedShow Answer

Because price is not a factor in the EOQ formula, quantity discounts will not affect EOQ calculations.

Correct AnswerverifiedShow Answer

An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.

Correct AnswerverifiedShow Answer

ROP models assume that demand during lead time is composed of a series of dependent daily demands.

Correct AnswerverifiedShow Answer

Which of these products would be most apt to involve the use of a single-period model?

Correct AnswerverifiedShow Answer

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is ___ percent.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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