BUS5115 Operations Management Unit 5 Graded Quiz — 25 Q&A
Verified Answers 2025
Course:
BUS5115 Operations Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5115 Unit 5 Graded Quiz — Inventory Management
25 Questions with Verified Answers | Score: 96/100
Question 1:
Which category of inventory represents items that have been partially processed but are not yet
completed and ready for sale?
A) Raw materials
B) Maintenance, repair, and operating (MRO) supplies
C) Work-in-process (WIP)
D) Finished goods
Answer: C
Explanation:
Work-in-process (WIP) inventory consists of materials that have entered the manufacturing
process but are not yet finished products. Raw materials have not yet been processed, and
finished goods are completed items ready for sale. MRO supplies are materials necessary for
production but not part of the final product.
Question 2:
In the context of ABC analysis, how are inventory items typically classified?
, A) By physical size and storage requirements
B) By annual dollar volume or usage value
C) By alphabetical order of supplier names
D) By the chronological order of their receipt
Answer: B
Explanation:
ABC analysis classifies inventory based on annual dollar volume, identifying the items that
represent the greatest investment. 'A' items account for the highest value but a small percentage
of total items, while 'C' items represent a large number of items with low total value.
Question 3:
The Economic Order Quantity (EOQ) model is designed primarily to minimize which of the
following?
A) Total holding costs only
B) Total ordering costs only
C) The sum of holding costs and ordering costs
D) Shortage and stockout costs
Answer: C
Explanation:
The fundamental goal of the EOQ model is to find the optimal order size that minimizes total
inventory costs, which is specifically the sum of annual holding (carrying) costs and annual
ordering (setup) costs. The optimal point occurs where these two costs are equal.
Question 4:
A manufacturing company observes that it frequently runs out of a critical component, halting
production. To mitigate the risk of these stockouts due to demand variability during the lead time,
the company should increase its:
A) Economic Order Quantity
B) Safety stock
C) Ordering frequency
D) Work-in-process inventory
Answer: B
Verified Answers 2025
Course:
BUS5115 Operations Management — University of the People (UoPeople)
Level:
MBA
Year:
2025/2026
Format:
Graded Quiz Solutions — 25 Q&A with Verified Answers
BUS5115 Unit 5 Graded Quiz — Inventory Management
25 Questions with Verified Answers | Score: 96/100
Question 1:
Which category of inventory represents items that have been partially processed but are not yet
completed and ready for sale?
A) Raw materials
B) Maintenance, repair, and operating (MRO) supplies
C) Work-in-process (WIP)
D) Finished goods
Answer: C
Explanation:
Work-in-process (WIP) inventory consists of materials that have entered the manufacturing
process but are not yet finished products. Raw materials have not yet been processed, and
finished goods are completed items ready for sale. MRO supplies are materials necessary for
production but not part of the final product.
Question 2:
In the context of ABC analysis, how are inventory items typically classified?
, A) By physical size and storage requirements
B) By annual dollar volume or usage value
C) By alphabetical order of supplier names
D) By the chronological order of their receipt
Answer: B
Explanation:
ABC analysis classifies inventory based on annual dollar volume, identifying the items that
represent the greatest investment. 'A' items account for the highest value but a small percentage
of total items, while 'C' items represent a large number of items with low total value.
Question 3:
The Economic Order Quantity (EOQ) model is designed primarily to minimize which of the
following?
A) Total holding costs only
B) Total ordering costs only
C) The sum of holding costs and ordering costs
D) Shortage and stockout costs
Answer: C
Explanation:
The fundamental goal of the EOQ model is to find the optimal order size that minimizes total
inventory costs, which is specifically the sum of annual holding (carrying) costs and annual
ordering (setup) costs. The optimal point occurs where these two costs are equal.
Question 4:
A manufacturing company observes that it frequently runs out of a critical component, halting
production. To mitigate the risk of these stockouts due to demand variability during the lead time,
the company should increase its:
A) Economic Order Quantity
B) Safety stock
C) Ordering frequency
D) Work-in-process inventory
Answer: B
