CH 10 - Inventory Models

CH 10 - Inventory Models © Cengage. Testing Powered by Cognero. Page 1 True / False 1. To be considered inventory, goods must be finished and waiting for delivery. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.01 - 10.1 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.1 Economic Order Quantity (EOQ) Model KEYWORDS: Bloom's: Remember 2. When demand is independent, it is not related to demand for other components or items produced by the firm. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.01 - 10.1 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.1 Economic Order Quantity (EOQ) Model KEYWORDS: Bloom's: Remember 3. Constant demand is a key assumption of the EOQ model. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.01 - 10.1 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.1 Economic Order Quantity (EOQ) Model KEYWORDS: Bloom's: Understand 4. In the EOQ model, if the average inventory during each cycle is 1/2Q, the average inventory over any number of cycles is Q/2. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: IMS.ASWC.19.10.01 - 10.1 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.1 Economic Order Quantity (EOQ) Model CH 10 - Inventory Models © Cengage. Testing Powered by Cognero. Page 2 KEYWORDS: Bloom's: Understand 5. The single-period inventory model is most applicable to items that are perishable or have seasonal demand. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.05 - 10.5 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.5 Single-Period Inventory Model with Probabilistic Demand KEYWORDS: Bloom's: Remember 6. The time between placing orders is the lead time. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.01 - 10.1 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.1 Economic Order Quantity (EOQ) Model KEYWORDS: Bloom's: Remember 7. If the optimal production lot size decreases, average inventory increases. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: IMS.ASWC.19.10.02 - 10.2 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.2 Economic Production Lot Size Model KEYWORDS: Bloom's: Remember 8. If an item's per-unit backorder cost is greater than its per-unit holding cost, no intentional shortage should be planned. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: IMS.ASWC.19.10.03 - 10.3 NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking TOPICS: 10.3 Inventory Model with Planned Shortages