C720 OA Prep Questions with Verified Correct
Answers
Economic Order Quantity (EOQ)
Inventory does not require production
Minimize total annual costs of orderings and holding inventory by varying the order quantity
Economic Production Quantity (EPQ)
Inventory that will be used in production
Minimize total annual costs of orderings and holding inventory by varying the order quantity
Quantity Discount Model
A discount offered in price for ordering above a specified amount
Raw Materials
These parts and materials are obtained from suppliers and are used in the production process
Work-in-process (WIP)
These are partly finished parts, components, subassemblies, or modules
Finished Goods
Items are ready to ship to the customer
No more work is required
Replacement Parts Inventory
Maintained to replace other parts in machinery or equipment as those parts wear out
Supplies
, Parts or materials are used to support the production process but not usually a component of
the product.
These items, such as lubricant and cutting tools, are consumed in the production process.
Transportation
The portion of inventory that is in the process of being shipped through the distribution
system
Peak Demand
Occurs in response to planned events such as advertising, publicity or promotion
Seasonal Demand
As shoppers adjust their purchase velocity in line with holidays, especially Christmas
Unexpected Demand
Which occurs due to a usually-unexpected event.
Chase Demand
Occurs when a company has to adjust production by rates to match demand by varying the
workforce and using overtime
Bottleneck
Most limiting constraint on the system
Regulatory Bottlenecks
Imports, exports, U.S Customs or pollutant emissions and the EPA
Labor Bottlenecks
Available skills or work shift availability
Answers
Economic Order Quantity (EOQ)
Inventory does not require production
Minimize total annual costs of orderings and holding inventory by varying the order quantity
Economic Production Quantity (EPQ)
Inventory that will be used in production
Minimize total annual costs of orderings and holding inventory by varying the order quantity
Quantity Discount Model
A discount offered in price for ordering above a specified amount
Raw Materials
These parts and materials are obtained from suppliers and are used in the production process
Work-in-process (WIP)
These are partly finished parts, components, subassemblies, or modules
Finished Goods
Items are ready to ship to the customer
No more work is required
Replacement Parts Inventory
Maintained to replace other parts in machinery or equipment as those parts wear out
Supplies
, Parts or materials are used to support the production process but not usually a component of
the product.
These items, such as lubricant and cutting tools, are consumed in the production process.
Transportation
The portion of inventory that is in the process of being shipped through the distribution
system
Peak Demand
Occurs in response to planned events such as advertising, publicity or promotion
Seasonal Demand
As shoppers adjust their purchase velocity in line with holidays, especially Christmas
Unexpected Demand
Which occurs due to a usually-unexpected event.
Chase Demand
Occurs when a company has to adjust production by rates to match demand by varying the
workforce and using overtime
Bottleneck
Most limiting constraint on the system
Regulatory Bottlenecks
Imports, exports, U.S Customs or pollutant emissions and the EPA
Labor Bottlenecks
Available skills or work shift availability
