GE 5103 Operations Management Lesson 11 Quiz
Trine University 35 Questions Actual Exam
2026/2027 | Complete Exam-Style Questions with
Detailed Rationales | Pass Guaranteed – A+ Graded
SECTION 1: Inventory Management Fundamentals (Questions 1–7)
Q1: The basic purposes of inventory analysis in manufacturing and stockkeeping
services are to specify:
A. (1) when items should be ordered and (2) what type of items should be ordered
B. (1) when items should be ordered and (2) how large the order should be [CORRECT]
C. (1) how large the order should be and (2) what type of items should be ordered
D. (1) when items should arrive and (2) how much storage space is needed
Correct Answer: B
Rationale: Correct because the two fundamental purposes of inventory analysis are to
determine (1) when items should be ordered and (2) how large the order should be. This
matches GE 5103 Lesson 11 content on inventory management fundamentals.
Q2: Which of the following is NOT typically considered an inventory holding cost?
A. Storage facility costs
B. Insurance and taxes
C. Ordering cost per order [CORRECT]
D. Obsolescence and depreciation
Correct Answer: C
Rationale: Correct because ordering cost per order is a separate category of inventory
cost (ordering/setup cost), not a holding cost. Holding costs include storage facilities,
, handling, insurance, pilferage, breakage, obsolescence, depreciation, taxes, and the
opportunity cost of capital.
Q3: The fixed-order quantity inventory model (EOQ model) is more appropriate for which
type of items?
A. Low-value items that are ordered in bulk
B. Important items such as critical repair parts [CORRECT]
C. Items with highly variable lead times
D. Items that are ordered on a fixed schedule regardless of inventory level
Correct Answer: B
Rationale: Correct because the fixed-order quantity model (Q-model) is more
appropriate for important items such as critical repair parts because there is closer
monitoring and therefore quicker response to a potential stockout.
Q4: In ABC classification, 'A' items are characterized by:
A. Being the least valuable and requiring minimal monitoring
B. Being the most valuable and requiring closer monitoring [CORRECT]
C. Having the highest quantity but lowest annual dollar volume
D. Representing approximately 80% of total inventory items
Correct Answer: B
Rationale: Correct because ABC classification categorizes inventory based on annual
dollar volume. 'A' items are the most valuable (e.g., critical repair parts) and require
closer monitoring, while 'C' items are the least valuable. This concept is tied to the
Pareto principle (80/20 rule).
Q5: The Pareto principle (80/20 rule) in inventory management suggests that:
A. 80% of inventory value comes from 20% of items [CORRECT]
B. 80% of inventory items represent 20% of total value
C. 80% of holding costs come from 20% of orders placed
Trine University 35 Questions Actual Exam
2026/2027 | Complete Exam-Style Questions with
Detailed Rationales | Pass Guaranteed – A+ Graded
SECTION 1: Inventory Management Fundamentals (Questions 1–7)
Q1: The basic purposes of inventory analysis in manufacturing and stockkeeping
services are to specify:
A. (1) when items should be ordered and (2) what type of items should be ordered
B. (1) when items should be ordered and (2) how large the order should be [CORRECT]
C. (1) how large the order should be and (2) what type of items should be ordered
D. (1) when items should arrive and (2) how much storage space is needed
Correct Answer: B
Rationale: Correct because the two fundamental purposes of inventory analysis are to
determine (1) when items should be ordered and (2) how large the order should be. This
matches GE 5103 Lesson 11 content on inventory management fundamentals.
Q2: Which of the following is NOT typically considered an inventory holding cost?
A. Storage facility costs
B. Insurance and taxes
C. Ordering cost per order [CORRECT]
D. Obsolescence and depreciation
Correct Answer: C
Rationale: Correct because ordering cost per order is a separate category of inventory
cost (ordering/setup cost), not a holding cost. Holding costs include storage facilities,
, handling, insurance, pilferage, breakage, obsolescence, depreciation, taxes, and the
opportunity cost of capital.
Q3: The fixed-order quantity inventory model (EOQ model) is more appropriate for which
type of items?
A. Low-value items that are ordered in bulk
B. Important items such as critical repair parts [CORRECT]
C. Items with highly variable lead times
D. Items that are ordered on a fixed schedule regardless of inventory level
Correct Answer: B
Rationale: Correct because the fixed-order quantity model (Q-model) is more
appropriate for important items such as critical repair parts because there is closer
monitoring and therefore quicker response to a potential stockout.
Q4: In ABC classification, 'A' items are characterized by:
A. Being the least valuable and requiring minimal monitoring
B. Being the most valuable and requiring closer monitoring [CORRECT]
C. Having the highest quantity but lowest annual dollar volume
D. Representing approximately 80% of total inventory items
Correct Answer: B
Rationale: Correct because ABC classification categorizes inventory based on annual
dollar volume. 'A' items are the most valuable (e.g., critical repair parts) and require
closer monitoring, while 'C' items are the least valuable. This concept is tied to the
Pareto principle (80/20 rule).
Q5: The Pareto principle (80/20 rule) in inventory management suggests that:
A. 80% of inventory value comes from 20% of items [CORRECT]
B. 80% of inventory items represent 20% of total value
C. 80% of holding costs come from 20% of orders placed
