MGSC 368v11 Final Exam Definitions
Questions and Answers Graded A 2024
MGSC
POSSIBLEA 8/14/24 .
, MGSC 368v11 Final Exam Definitions Questions and Answers Graded A
2024
❖ Single-period problem - Answers the question of how much to order
when an item is purchased only one time and it is expected that it will
be used and then not reordered.
❖ Fixed-order quantity model (Q-model) - An inventory control model
where the amount requisitioned is fixed and the actual ordering is
triggered by inventory dropping to a specified level of inventory.
❖ Fixed-time period model (P-model) - An inventory control model that
specifies inventory is ordered at the end of a predetermined time
period. The interval of time between orders is fixed and the order
quantity varies.
❖ Inventory position - The amount on hand plus on-order minus
backordered quantities. In the case where inventory has been allocated
for special purposes, the inventory position is reduced by these
allocated amounts.
❖ Optimal order quantity (Qopt) - This order size minimizes total annual
cost.
❖ Reorder point (R) - An order is placed when inventory drops to this level.
❖ Safety stock - The amount of inventory carried in addition to the
expected demand.
❖ Inventory turn - The cost of goods sold divided by the total average
value of inventory. A measure of the expected number of times that
inventory is replaced each year.
❖ Price-break model - This model is useful for finding the order quantity of
an item when the price of the item varies with the order size.
❖ Material requirements planning (MRP) - The logic for determining the
number of parts, components, and materials needed to produce a
product.
Questions and Answers Graded A 2024
MGSC
POSSIBLEA 8/14/24 .
, MGSC 368v11 Final Exam Definitions Questions and Answers Graded A
2024
❖ Single-period problem - Answers the question of how much to order
when an item is purchased only one time and it is expected that it will
be used and then not reordered.
❖ Fixed-order quantity model (Q-model) - An inventory control model
where the amount requisitioned is fixed and the actual ordering is
triggered by inventory dropping to a specified level of inventory.
❖ Fixed-time period model (P-model) - An inventory control model that
specifies inventory is ordered at the end of a predetermined time
period. The interval of time between orders is fixed and the order
quantity varies.
❖ Inventory position - The amount on hand plus on-order minus
backordered quantities. In the case where inventory has been allocated
for special purposes, the inventory position is reduced by these
allocated amounts.
❖ Optimal order quantity (Qopt) - This order size minimizes total annual
cost.
❖ Reorder point (R) - An order is placed when inventory drops to this level.
❖ Safety stock - The amount of inventory carried in addition to the
expected demand.
❖ Inventory turn - The cost of goods sold divided by the total average
value of inventory. A measure of the expected number of times that
inventory is replaced each year.
❖ Price-break model - This model is useful for finding the order quantity of
an item when the price of the item varies with the order size.
❖ Material requirements planning (MRP) - The logic for determining the
number of parts, components, and materials needed to produce a
product.
