OPMT 303 CHAPTER 14 UPDATED ACTUAL QUESTIONS
AND CORRECT ANSWERS
Question:
1. Unlike a requirements philosophy of inventory management, a replenishment philosophy
Answer:
is appropriate given independent demand
Question:
2. In a Q system, average inventory
Answer:
tends to be less than under a system of periodic review (P system).
Question:
3. Which cost is NOT part of inventory ordering costs?
A. transportation costs
B. obsolescence costs
C. setup costs
D. receiving costs
Answer:
B. obsolescence costs
Question:
4. Which of the following statements is NOT true about managing inventory in supply chains?
A. In a supply chain, a single firm typically controls all of the inventories that are required while
manufacturing a product.
B. Coordination among supply chain partners is essential while managing inventory across the supply
chain.
C. The total cost minimization approach can be applied while managing inventory across the supply chain.
D. Vendor-managed inventory is an initiative shifting responsibility for managing inventory to suppliers.
Answer:
A. In a supply chain, a single firm typically controls all of the inventories that are required while
manufacturing a product
Question:
5. Transportation cost is an example of
Answer:
Ordering cost
Question:
6. Independent demand inventory consists of
Answer:
inventory whos demand is determined by market condition's outside the firm
, Question:
7. In the basic EOQ model, if annual demand and carrying costs double, the EOQ
Answer:
remains the same Q = sqrt2SD/iC; if annual demand and carrying costs both double, they cancel each other
out and result in no change to EOQ.
Question:
8. A paint supplier that places orders for different colors of paint for delivery at the same time should use a
Answer:
P system P systems should be used for multiple items ordered from the same supplier and delivered in the
same shipment.
Question:
9. ABC analysis requires that inventory be classified according to
Answer:
annual dollar usage
Question:
10. The choice between P and Q systems should be based on
A. timing of replenishment.
B. type of record keeping.
C. cost of the item.
D. All of these choices are correct.
Answer:
D. All of these choices are correct
Question:
11. If the economic order quantity for an item is 140, what is the average number of cycle inventory units?
Answer:
Average inventory is EOQ/2 =
70.
Question:
12. Safety stock inventory is
Answer:
maintained to absorb uncertainty in, delivery lead time for suppliers
Question:
13. Which of the following is correct?
A. Anticipation inventory of raw materials may be held when a firm expects raw materials shortages in the
future.
B. Pipeline inventory quantities are affected by mode of transportation.
C. Safety stock may be held in raw materials, work-in-process, or finished goods.
D. All of these choices are correct.
Answer:
D. all of these choices are correct
AND CORRECT ANSWERS
Question:
1. Unlike a requirements philosophy of inventory management, a replenishment philosophy
Answer:
is appropriate given independent demand
Question:
2. In a Q system, average inventory
Answer:
tends to be less than under a system of periodic review (P system).
Question:
3. Which cost is NOT part of inventory ordering costs?
A. transportation costs
B. obsolescence costs
C. setup costs
D. receiving costs
Answer:
B. obsolescence costs
Question:
4. Which of the following statements is NOT true about managing inventory in supply chains?
A. In a supply chain, a single firm typically controls all of the inventories that are required while
manufacturing a product.
B. Coordination among supply chain partners is essential while managing inventory across the supply
chain.
C. The total cost minimization approach can be applied while managing inventory across the supply chain.
D. Vendor-managed inventory is an initiative shifting responsibility for managing inventory to suppliers.
Answer:
A. In a supply chain, a single firm typically controls all of the inventories that are required while
manufacturing a product
Question:
5. Transportation cost is an example of
Answer:
Ordering cost
Question:
6. Independent demand inventory consists of
Answer:
inventory whos demand is determined by market condition's outside the firm
, Question:
7. In the basic EOQ model, if annual demand and carrying costs double, the EOQ
Answer:
remains the same Q = sqrt2SD/iC; if annual demand and carrying costs both double, they cancel each other
out and result in no change to EOQ.
Question:
8. A paint supplier that places orders for different colors of paint for delivery at the same time should use a
Answer:
P system P systems should be used for multiple items ordered from the same supplier and delivered in the
same shipment.
Question:
9. ABC analysis requires that inventory be classified according to
Answer:
annual dollar usage
Question:
10. The choice between P and Q systems should be based on
A. timing of replenishment.
B. type of record keeping.
C. cost of the item.
D. All of these choices are correct.
Answer:
D. All of these choices are correct
Question:
11. If the economic order quantity for an item is 140, what is the average number of cycle inventory units?
Answer:
Average inventory is EOQ/2 =
70.
Question:
12. Safety stock inventory is
Answer:
maintained to absorb uncertainty in, delivery lead time for suppliers
Question:
13. Which of the following is correct?
A. Anticipation inventory of raw materials may be held when a firm expects raw materials shortages in the
future.
B. Pipeline inventory quantities are affected by mode of transportation.
C. Safety stock may be held in raw materials, work-in-process, or finished goods.
D. All of these choices are correct.
Answer:
D. all of these choices are correct
