ISDS 3115 FINAL QUESTIONS WITH VERIFIED
ANSWERS
One use of inventory is - Answers - To provide a hedge against inflation
Which of the following is NOT a type of inventory?
A. work-in-process
B. finished goods
C. raw material
D. MRP - Answers - D. MRP
ABC analysis divides an organization's on-hand inventory into three classes based upon
- Answers - Annual dollar volume
Which of the following does NOT belong to ordering costs?
A. order processing
B. clerical support
C. interest payments
D. cost of supplies - Answers - C. interest payments
What is the cost to prepare a machine or process for production? - Answers - Setup
cost
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 - Answers - A
probabilistic model
What is a system for ordering items that have little or no value at the end of a sales
period? - Answers - Single-period inventory modle
For seasonal products, the service level should be set to equal - Answers - Shortage
cost / (overage cost + shortage cost)
A system that triggers ordering on a uniform time basis is called - Answers - A fixed-
period system
Which of the following is NOT one of the assumptions of fixed-period systems?
A. The only relevant costs are the ordering and holding costs
B. Lead times are known
C. Lead times are variable
D. Items are independent of one another - Answers - C. Lead times are variable
Which of the following does NOT belong to holding costs?
, A. storage costs
B. pilferage, scrap, and obsolescence
C. order processing
D. insurance on inventory - Answers - C. order processing
Inventory record accuracy would be decreased by - Answers - A. increasing stockroom
accessibility
The objective of inventory management is to - Answers - Strike a balance between
inventory investment and customer service
Inventory control models assume that demand for an item is - Answers - Either
independent or dependent on the demand for other items
The appropriate level of safety stock is typically determined by - Answers - Choosing
the level of safety stock that assures a given service level
Which of the following types of inventory describes inventory that has been purchased
but not processed? - Answers - Raw material inventory
A single-period inventory model is NOT applicable for
A. newspapers
B. furniture
C. seasonal goods
D. milk - Answers - B. furniture
In the single-period inventory model, the overage cost is - Answers - Cost per unit -
salvage value per unit
A system that keeps track of each withdrawal or addition to inventory continuously is -
Answers - A perpetual inventory system
A supply chain ends with - Answers - a satisfied customer
Which of the following statements is NOT one of the differentiation strategy decisions?
A. Modular design to aid product differentiation
B. Minimize inventory to avoid product obsolescence
C. Gather and communicate market research data
D. Use buffer stocks to ensure speedy supply - Answers - D. Use buffer stocks to
ensure speedy supply
What is transferring a firm's activities that have traditionally been internal to external
suppliers? - Answers - Outsourcing
The advantage of having few suppliers is to - Answers - Form a long-term relationship
ANSWERS
One use of inventory is - Answers - To provide a hedge against inflation
Which of the following is NOT a type of inventory?
A. work-in-process
B. finished goods
C. raw material
D. MRP - Answers - D. MRP
ABC analysis divides an organization's on-hand inventory into three classes based upon
- Answers - Annual dollar volume
Which of the following does NOT belong to ordering costs?
A. order processing
B. clerical support
C. interest payments
D. cost of supplies - Answers - C. interest payments
What is the cost to prepare a machine or process for production? - Answers - Setup
cost
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 - Answers - A
probabilistic model
What is a system for ordering items that have little or no value at the end of a sales
period? - Answers - Single-period inventory modle
For seasonal products, the service level should be set to equal - Answers - Shortage
cost / (overage cost + shortage cost)
A system that triggers ordering on a uniform time basis is called - Answers - A fixed-
period system
Which of the following is NOT one of the assumptions of fixed-period systems?
A. The only relevant costs are the ordering and holding costs
B. Lead times are known
C. Lead times are variable
D. Items are independent of one another - Answers - C. Lead times are variable
Which of the following does NOT belong to holding costs?
, A. storage costs
B. pilferage, scrap, and obsolescence
C. order processing
D. insurance on inventory - Answers - C. order processing
Inventory record accuracy would be decreased by - Answers - A. increasing stockroom
accessibility
The objective of inventory management is to - Answers - Strike a balance between
inventory investment and customer service
Inventory control models assume that demand for an item is - Answers - Either
independent or dependent on the demand for other items
The appropriate level of safety stock is typically determined by - Answers - Choosing
the level of safety stock that assures a given service level
Which of the following types of inventory describes inventory that has been purchased
but not processed? - Answers - Raw material inventory
A single-period inventory model is NOT applicable for
A. newspapers
B. furniture
C. seasonal goods
D. milk - Answers - B. furniture
In the single-period inventory model, the overage cost is - Answers - Cost per unit -
salvage value per unit
A system that keeps track of each withdrawal or addition to inventory continuously is -
Answers - A perpetual inventory system
A supply chain ends with - Answers - a satisfied customer
Which of the following statements is NOT one of the differentiation strategy decisions?
A. Modular design to aid product differentiation
B. Minimize inventory to avoid product obsolescence
C. Gather and communicate market research data
D. Use buffer stocks to ensure speedy supply - Answers - D. Use buffer stocks to
ensure speedy supply
What is transferring a firm's activities that have traditionally been internal to external
suppliers? - Answers - Outsourcing
The advantage of having few suppliers is to - Answers - Form a long-term relationship
