FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Managing Inventory

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Among the advantages of cycle counting is that it:

A) makes the annual physical inventory more acceptable to management.
B) does not require the detailed records necessary when annual physical inventory is used.
C) does not require highly trained people.
D) allows more rapid identification of errors and consequent remedial action than is possible with annual physical inventory.
E) does not need to be performed for less expensive items.

F) A) and B)
G) C) and D)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

A local club is selling Christmas trees and deciding how many to stock for the month of December.If demand is normally distributed with a mean of 100 and standard deviation of 20,trees have no salvage value at the end of the month,trees cost $20,and trees sell for $50 what is the service level?

A) .60
B) .20
C) .84
D) .40
E) unable to determine given the above information

F) B) and D)
G) C) and E)

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

Consider a local club selling Christmas trees.If trees cost $15 and sell for $60 with no salvage value,what is the ideal service level? If salvage value is increased to $5,what is the change in service level?

In the basic EOQ model,if D = 6000 per year,S = $100,and holding cost = $5 per unit per month,what is the economic order quantity?

In the quantity discount model,the cost of acquiring goods (product cost)is not a factor in determining lot size.

An inventory decision rule states,"When the inventory level goes down to 14 gearboxes,100 gearboxes will be ordered." Which of the following statements is TRUE?

Which of these statements about the production order quantity model is FALSE?

A(n)________ model gives satisfactory answers even with substantial variations in its parameters.

An organization has had a policy of ordering 70 units at a time.Their annual demand is 340 units,and the item has an annual carrying cost of $2.The assumptions of the EOQ are thought to apply.For what value of ordering cost would this order size be optimal?

Groundz Coffee Shop uses 4 pounds of a specialty tea weekly;each pound costs $16.Carrying costs are $1 per pound per week because space is very scarce.It costs the firm $8 to prepare an order.Assume the basic EOQ model with no shortages applies.Assume 52 weeks per year,closed on Mondays. a.How many pounds should Groundz order at a time? b.What is total annual cost (excluding item cost)of managing this item on a cost-minimizing basis? c.In pursuing lowest annual total cost,how many orders should Groundz place annually? d.How many days will there be between orders (assume 312 operating days)if Groundz practices EOQ behavior?

A disadvantage of the fixed-period inventory system is that:

The proper quantity of safety stock is typically determined by:

________ inventory is material that is usually purchased,but has yet to enter the manufacturing process.

Compare the assumptions of the production order quantity model to those of the basic EOQ model.

The annual demand for an item is 10,000 units.The cost to process an order is $75 and the annual inventory holding cost is 20% of item cost.(a)What is the optimal order quantity,given the following price breaks for purchasing the item? (b)What price should the firm pay per unit? (c)What is the total annual cost at the optimal behavior?

ABC analysis classifies inventoried items into three groups,usually based on annual units or quantities used.

Safety stock in inventory systems depends only on the average demand during the lead time.

Which of the following statements about quantity discounts is FALSE?

Your company has compiled the following data on the small set of products that comprise the specialty repair parts division.Perform ABC analysis on the data.Which products do you suggest the firm keep the tightest control over? Explain.

The soft goods department of a large department store sells 175 units per month of a certain large bath towel.The unit cost of a towel to the store is $2.50 and the cost of placing an order has been estimated to be $12.00.The store uses an inventory carrying charge of I = 27% per year.Determine (a)the optimal order quantity, (b)the order frequency,and (c)the annual holding and setup cost.If,through automation of the purchasing process,the ordering cost can be cut to $4.00,what will be (d)the new economic order quantity, (e)the order frequency,and (f)annual holding and setup costs? Explain these results.