2026 WGU C720 Complete OA Prep
Guide with verified answers A+
Graded
Inputs - correct answer>>>People, capital, material, money
Outputs - correct answer>>>Services and goods
Sustainability - correct answer>>>Defined broadly in operations and supply chain
management as the ethical issues an organization faces to balance financial
performance while maintaining social responsibility standards and a responsible
environmental profile.
VIRAL - correct answer>>>Acronym - A framework for competitive advantage.
Viral, Inimitable, Rare, Aptitude, Lifespan.
The advantage must provide Value to consumers; it should be Inimitable (not easily
imitated), Rare, and an organization must have the Aptitude (capability) and Lifespan
(sustainability) to earn appropriate returns on the advantage.
Productivity - correct answer>>>A mathematical calculation; it is the ratio of the outputs
achieved divided by the inputs consumed to achieve those outputs.
6 Types of Inventory - correct answer>>>o Raw Materials
o Work In Progress
o Finished Goods
o Replacement Parts Inventory
o Supplies
o Transportation
Raw Materials - correct answer>>>These parts and materials are obtained from
suppliers and are used in the production process.
Work-in-process (WIP) - correct answer>>>These are partly finished parts,
components, sub-assemblies, or modules.
Finished Goods - correct answer>>>Items are ready to ship to the customer. No more
work is required.
Replacement parts inventory - correct answer>>>These are maintained to replace other
parts in machinery or equipment as those parts wear out
,Supplies - correct answer>>>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 (pipeline): - correct answer>>>The portion of inventory that is in the
process of being shipped through the distribution system.
4 Types of Demand - correct answer>>>o Peak
o Seasonal
o Unexpected
o Chase
Peak Demand - correct answer>>>Demand which occurs in response to planned events
such as advertising, publicity or promotion. The release of a popular game franchise's
latest version often causes peak demand for a few days or weeks.
Seasonal Demand - correct answer>>>Demand as shoppers adjust their purchase
velocity in line with holidays, especially Christmas. But Halloween, Thanksgiving and
even St. Patrick's Day also create seasonal demand for certain kinds of merchandise.
Unexpected Demand - correct answer>>>Demand which occurs due to a usually-
unexpected event. For example, an underdog school may upset a favorite during the
NCAA's basketball tournament, causing a run on their merchandise.
Chase Demand - correct answer>>>Demand that occurs when a company has to adjust
production by rates to match demand by varying the workforce and using overtime.
Companies vary the workforce by adding or reducing the number of employees on duty
at any given time. And they may choose to provide overtime by asking workers to stay
on the job beyond their normally scheduled time.
Safety Stock - correct answer>>>A cushion of inventory to protect against unexpected
demand. In this way, they can continue to meet customer demand without delays.
Stock Out - correct answer>>>Occurs when inventory is depleted.
Perpetual Inventory System - correct answer>>>Continuously monitors inventory levels
and is also called a continuous review system. Requires human input (i.e. cashier) and
the ordering of more inventory is triggered by reorder point.
o Requires an exact inventory balance at all times
o Best for big businesses, retail stores, or banks
o High value and high volume
o Expensive to implement and maintain
Periodic Inventory System - correct answer>>>Randomly monitors inventory levels and
is also called the fixed order interval system.
, o Requires a physical count periodically
o Used when a supplier will only deliver at specific time intervals
o Low value and volume
o Used for small businesses
o Inexpensive to implement and maintain
ABC analysis - correct answer>>>Has been developed to determine which inventory
items should receive the highest level of control. By multiplying the dollar value of each
item by its annual usage, a dollar usage value can be obtained. Dollar usage follows the
Pareto Principle in that frequently, only 20% of all the items account for 80% of the total
dollar usage, while the remaining items frequently account for only 20% of the dollar
usage. This principle leads to the _____ classification, which is based on focusing
efforts where the payoff is highest
Pareto Principle - correct answer>>>Only 20% of all the items account for 80% of the
total dollar usage, while the remaining items frequently account for only 20% of the
dollar usage. This principle leads to the ABC classification, which is based on focusing
efforts where the payoff is highest
Economic Order Quantity (EOQ) - correct answer>>>For inventory that doesn't require
production, when demand is constant and known, when cost per unit does not depend
on order quantity.
Most appropriate for retail stores or companies that order finished goods.
Economic Production Quantity (EPQ) - correct answer>>>For inventory that will be used
in production, When incremental ordering and depletion of inventory is allowed, Also
called production order quantity.
Most appropriate for manufacturing and production companies
The goal of firms using the EOQ & EPQ model - correct answer>>>Minimize the total
annual costs of ordering and holding inventory by varying the order quantity.
Quantity discount model - correct answer>>>A discount offered in price for ordering
above a specified amount
Transportation discounts - correct answer>>>A discount offered on shipping cost for
ordering above a specified amount
Revenue Sharing - correct answer>>>When 2 or more companies partner and divides
the profits received based on an agreement between all parties involved.
Reserve Capacity - correct answer>>>When a company stores, or pays another
company to store, excess inventory to be used for unexpected demand
Guide with verified answers A+
Graded
Inputs - correct answer>>>People, capital, material, money
Outputs - correct answer>>>Services and goods
Sustainability - correct answer>>>Defined broadly in operations and supply chain
management as the ethical issues an organization faces to balance financial
performance while maintaining social responsibility standards and a responsible
environmental profile.
VIRAL - correct answer>>>Acronym - A framework for competitive advantage.
Viral, Inimitable, Rare, Aptitude, Lifespan.
The advantage must provide Value to consumers; it should be Inimitable (not easily
imitated), Rare, and an organization must have the Aptitude (capability) and Lifespan
(sustainability) to earn appropriate returns on the advantage.
Productivity - correct answer>>>A mathematical calculation; it is the ratio of the outputs
achieved divided by the inputs consumed to achieve those outputs.
6 Types of Inventory - correct answer>>>o Raw Materials
o Work In Progress
o Finished Goods
o Replacement Parts Inventory
o Supplies
o Transportation
Raw Materials - correct answer>>>These parts and materials are obtained from
suppliers and are used in the production process.
Work-in-process (WIP) - correct answer>>>These are partly finished parts,
components, sub-assemblies, or modules.
Finished Goods - correct answer>>>Items are ready to ship to the customer. No more
work is required.
Replacement parts inventory - correct answer>>>These are maintained to replace other
parts in machinery or equipment as those parts wear out
,Supplies - correct answer>>>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 (pipeline): - correct answer>>>The portion of inventory that is in the
process of being shipped through the distribution system.
4 Types of Demand - correct answer>>>o Peak
o Seasonal
o Unexpected
o Chase
Peak Demand - correct answer>>>Demand which occurs in response to planned events
such as advertising, publicity or promotion. The release of a popular game franchise's
latest version often causes peak demand for a few days or weeks.
Seasonal Demand - correct answer>>>Demand as shoppers adjust their purchase
velocity in line with holidays, especially Christmas. But Halloween, Thanksgiving and
even St. Patrick's Day also create seasonal demand for certain kinds of merchandise.
Unexpected Demand - correct answer>>>Demand which occurs due to a usually-
unexpected event. For example, an underdog school may upset a favorite during the
NCAA's basketball tournament, causing a run on their merchandise.
Chase Demand - correct answer>>>Demand that occurs when a company has to adjust
production by rates to match demand by varying the workforce and using overtime.
Companies vary the workforce by adding or reducing the number of employees on duty
at any given time. And they may choose to provide overtime by asking workers to stay
on the job beyond their normally scheduled time.
Safety Stock - correct answer>>>A cushion of inventory to protect against unexpected
demand. In this way, they can continue to meet customer demand without delays.
Stock Out - correct answer>>>Occurs when inventory is depleted.
Perpetual Inventory System - correct answer>>>Continuously monitors inventory levels
and is also called a continuous review system. Requires human input (i.e. cashier) and
the ordering of more inventory is triggered by reorder point.
o Requires an exact inventory balance at all times
o Best for big businesses, retail stores, or banks
o High value and high volume
o Expensive to implement and maintain
Periodic Inventory System - correct answer>>>Randomly monitors inventory levels and
is also called the fixed order interval system.
, o Requires a physical count periodically
o Used when a supplier will only deliver at specific time intervals
o Low value and volume
o Used for small businesses
o Inexpensive to implement and maintain
ABC analysis - correct answer>>>Has been developed to determine which inventory
items should receive the highest level of control. By multiplying the dollar value of each
item by its annual usage, a dollar usage value can be obtained. Dollar usage follows the
Pareto Principle in that frequently, only 20% of all the items account for 80% of the total
dollar usage, while the remaining items frequently account for only 20% of the dollar
usage. This principle leads to the _____ classification, which is based on focusing
efforts where the payoff is highest
Pareto Principle - correct answer>>>Only 20% of all the items account for 80% of the
total dollar usage, while the remaining items frequently account for only 20% of the
dollar usage. This principle leads to the ABC classification, which is based on focusing
efforts where the payoff is highest
Economic Order Quantity (EOQ) - correct answer>>>For inventory that doesn't require
production, when demand is constant and known, when cost per unit does not depend
on order quantity.
Most appropriate for retail stores or companies that order finished goods.
Economic Production Quantity (EPQ) - correct answer>>>For inventory that will be used
in production, When incremental ordering and depletion of inventory is allowed, Also
called production order quantity.
Most appropriate for manufacturing and production companies
The goal of firms using the EOQ & EPQ model - correct answer>>>Minimize the total
annual costs of ordering and holding inventory by varying the order quantity.
Quantity discount model - correct answer>>>A discount offered in price for ordering
above a specified amount
Transportation discounts - correct answer>>>A discount offered on shipping cost for
ordering above a specified amount
Revenue Sharing - correct answer>>>When 2 or more companies partner and divides
the profits received based on an agreement between all parties involved.
Reserve Capacity - correct answer>>>When a company stores, or pays another
company to store, excess inventory to be used for unexpected demand
