OPMA UTA (Bradley Masters)( Correctly solved)

OPMA UTA (Bradley Masters)( Correctly solved)
Inventory correct answers The stock of any item or resource used in an organization


Inventory System correct answers A set of policies and controls that monitors levels of inventory and
determines what levels should be maintained, replenished, and how large the orders should be


Basic purposes of Inventory Analysis correct answers 1. When the items should be ordered
2. How large the order should be


In inventory models, HIGH holding costs tend to favor HIGH inventory levels correct answers False
(high holding costs favor low inventory levels)


If costs to change from producing one product to producing another is Zero, the lot size would be very
small correct answers TRUE


Shortage costs are precise and easy to measure correct answers FALSE


Dependent Demand Inventory levels are managed by calculations using calculus-driven, cost-minimizing
models correct answers FALSE


Fixed-Time Period Inventory System has a smaller average inventory than the fixed-order quantity
system. correct answers False (fixed-time model has a larger average inventory)


The Fixed-order quantity inventory model favors LESS EXPENSIVE items because average inventory is
lower correct answers FALSE


The fixed-order quantity inventory model is more appropriate for important items such as critical repairs
because there is closer monitoring and quicker responses to potential stockout correct answers TRUE


The fixed-order quantity model requires more time to maintain due to all additions and withdrawals being
logged correct answers TRUE

,Fixed-order quantity inventory models are "event triggered" correct answers TRUE


Fixed-order quantity inventory models are "time triggered" correct answers FALSE


Fixed-time period inventory models are "event triggered" correct answers FALSE


Fixed-time period inventory models are "time triggered" correct answers TRUE


Fixed-order quantity inventory systems determine the reorder point, R and the order quantity, Q values.
correct answers TRUE


The computation of a firm's inventory position is found by taking the inventory on hand and adding it to
the on-order inventory, and then subtracting back-ordered inventory correct answers TRUE


Using the probability approach we assume that the demand over a period of time is normally distributed.
correct answers TRUE


SAFETY STOCK can be defined as the amount of inventory carried in addition to the expected demand.
correct answers TRUE


If demand for an item is normally distributed we plan for demand to be twice the average demand and
carry 2 standard deviations worth of safety stock inventory. correct answers FALSE


Safety stock can be computed when using the fixed-order quantity inventory model by multiplying a "z"
value representing the number of standard deviations to achieve a service level or probability by the
standard deviation of periodic demand correct answers TRUE


The key difference between a fixed-order quantity inventory model, where demand is known and one
where demand is uncertain is in computing the reorder point. correct answers TRUE


Fixed-time period inventory models generate order quantities that vary from time period to time period,
depending on the usage rate. correct answers TRUE

,Fixed-order quantity systems assume a random depletion of inventory, with less than an immediate order
when a reorder point is reached. correct answers FALSE


The standard fixed-time period model assumes that inventory is never counted but determined by EOQ
measures. correct answers FALSE


Safety stock is not necessary in any fixed-time period system. correct answers FALSE


In the fixed-time period model it is necessary to determine the inventory currently on hand to calculate
the size of the order to place with a vendor. correct answers TRUE


Some inventory situations involve placing orders to cover only one demand period or to cover short-lived
items at frequent intervals. correct answers TRUE


The optimal stocking decision in inventory management, when using marginal analysis, occurs at the
point where the benefits derived from carrying the next unit are more than the costs for that unit. correct
answers FALSE


When stocked items are sold, the optimal inventory decision using marginal analysis is to stock that
quantity where the probable profit from the sale or use of the last unit is equal to or greater than the
probable losses if the last unit remains unsold. correct answers TRUE


Cycle counting is a physical inventory-taking technique in which inventory is counted on a frequent basis
rather than once or twice a year. correct answers TRUE


The "sawtooth effect," named after turn-around artist Al "chainsaw" Dunlap, is the severe reduction of
inventory and service levels that occurs when a firm has gone through a hostile takeover. correct answers
FALSE


The "sawtooth effect," is named after the jagged shape of the graph of inventory levels over time. correct
answers TRUE


Price-break models deal with the fact that the selling price of an item varies with the order size. correct
answers TRUE

, Price-break models deal with the fact that the selling price of an item generally increases as the order size
increases. correct answers FALSE


Price-break models deal with discrete or step changes in price as order size changes rather than a per-unit
change. correct answers TRUE


In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to
calculate the economic order quantity for each possible price. correct answers TRUE


In a price break model of lot sizing, to find the lowest-cost order quantity, it is sometimes necessary to
calculate the economic order quantity for each possible price and to check to see whether the lowest cost
quantity is feasible. correct answers TRUE


In a price break model of lot sizing the lowest cost quantity is always feasible. correct answers FALSE


One of the drivers of the direct-to-store (direct distribution) approach is the upstream migration of value-
added logistics services. correct answers TRUE


One of the drivers of the direct-to-store (direct distribution) approach is the increase in global sourcing.
correct answers TRUE


One of the drivers of the direct-to-store (direct distribution) approach is the decrease in trucking industry
regulation. correct answers FALSE


You should visualize inventory as stacks of money sitting on forklifts, on shelves, and in trucks and
planes while in transit. correct answers TRUE


One of the daily, delicate balancing acts that Logistics managers have to perform involves the trade-off
between transportation costs and fulfillment speed. correct answers TRUE


One of the daily, delicate balancing acts that Logistics managers have to perform involves the trade-off
between customer satisfaction and cost to serve. correct answers TRUE