UARK SCMT 2103 CORE EXAMS ANSWERS AND
QUESTIONS SET A+
✔✔In a retail store, when does the lead time end? - ✔✔When the inventory is stocked
on the shelf
✔✔Lead time variability is really a measure of lead time ___________________. -
✔✔Uncertainty
✔✔How can a company's inventory position be determined? - ✔✔On-hand inventory.
plus on-order inventory, minus backorders
✔✔Safety stock increases which aspect of a continuous review policy? - ✔✔Reorder
point
✔✔When determining when or how much to order, which inventory variable should be
used? - ✔✔Inventory position
✔✔If a customer uses a continuous review policy to manage inventory, when is it
possible to stockout? - ✔✔Only during lead time
✔✔Which inventory policy will create the most uncertainty for a company's
transportation providers? - ✔✔Continuous review
✔✔Which inventory policy requires less safety stock? - ✔✔Continuous review
✔✔If a fulfillment center has no on-hand inventory but receives an order that cannot be
immediately filled, this order represents ______________ if the customer will wait. -
✔✔A backorder
✔✔A reorder point is a point in _______________________. - ✔✔A company's
inventory position
, ✔✔If a company places a replenishment order on the same day each week, which
policy is being used? - ✔✔Periodic review
✔✔Everything else held equal, a decrease in the cost of overstocking is likely to
_________. - ✔✔Increase the unit profit margin
✔✔Which of the following is not part of the cost of overproduction - ✔✔Ordering/setup
cost
✔✔Everything else held equal, an increase in transportation cost is likely to _________.
- ✔✔both (a) and (c) are correct
increase the cost of overstocking
decrease the cost of understocking
✔✔Which of the following contributes to profit margin per unit? - ✔✔All of the above
Costs to produce/purchase the item.
Costs to move/transport the item.
Under or Overstocking the item.
✔✔Which of the following is not relevant in determining how much to order when using
a newsvendor model? - ✔✔Cost of ordering
✔✔If the profit margin per unit decreases (all else equal), the optimal order quantity will
___________. - ✔✔decrease
✔✔A store receives a low-margin consumable with a shelf life of only a few days after
which the item discarded. Which of the following is TRUE? - ✔✔Everything else held
equal, the merchant would prefer to understock rather than overstock.
✔✔In the newsvendor model, what is a simple way to define the optimal in-stock
probability (%)? - ✔✔Cost of understock / (cost of overstock + cost of understock)
✔✔A merchant is planning how much of a high-margin product to purchase for a special
event. Any product not sold can be used by the store later in a different product
assortment. Which of the following is TRUE? - ✔✔Both (a) and (c) are true
Everything else held equal, the merchant would prefer to overstock rather than
understock.
QUESTIONS SET A+
✔✔In a retail store, when does the lead time end? - ✔✔When the inventory is stocked
on the shelf
✔✔Lead time variability is really a measure of lead time ___________________. -
✔✔Uncertainty
✔✔How can a company's inventory position be determined? - ✔✔On-hand inventory.
plus on-order inventory, minus backorders
✔✔Safety stock increases which aspect of a continuous review policy? - ✔✔Reorder
point
✔✔When determining when or how much to order, which inventory variable should be
used? - ✔✔Inventory position
✔✔If a customer uses a continuous review policy to manage inventory, when is it
possible to stockout? - ✔✔Only during lead time
✔✔Which inventory policy will create the most uncertainty for a company's
transportation providers? - ✔✔Continuous review
✔✔Which inventory policy requires less safety stock? - ✔✔Continuous review
✔✔If a fulfillment center has no on-hand inventory but receives an order that cannot be
immediately filled, this order represents ______________ if the customer will wait. -
✔✔A backorder
✔✔A reorder point is a point in _______________________. - ✔✔A company's
inventory position
, ✔✔If a company places a replenishment order on the same day each week, which
policy is being used? - ✔✔Periodic review
✔✔Everything else held equal, a decrease in the cost of overstocking is likely to
_________. - ✔✔Increase the unit profit margin
✔✔Which of the following is not part of the cost of overproduction - ✔✔Ordering/setup
cost
✔✔Everything else held equal, an increase in transportation cost is likely to _________.
- ✔✔both (a) and (c) are correct
increase the cost of overstocking
decrease the cost of understocking
✔✔Which of the following contributes to profit margin per unit? - ✔✔All of the above
Costs to produce/purchase the item.
Costs to move/transport the item.
Under or Overstocking the item.
✔✔Which of the following is not relevant in determining how much to order when using
a newsvendor model? - ✔✔Cost of ordering
✔✔If the profit margin per unit decreases (all else equal), the optimal order quantity will
___________. - ✔✔decrease
✔✔A store receives a low-margin consumable with a shelf life of only a few days after
which the item discarded. Which of the following is TRUE? - ✔✔Everything else held
equal, the merchant would prefer to understock rather than overstock.
✔✔In the newsvendor model, what is a simple way to define the optimal in-stock
probability (%)? - ✔✔Cost of understock / (cost of overstock + cost of understock)
✔✔A merchant is planning how much of a high-margin product to purchase for a special
event. Any product not sold can be used by the store later in a different product
assortment. Which of the following is TRUE? - ✔✔Both (a) and (c) are true
Everything else held equal, the merchant would prefer to overstock rather than
understock.
