Chapter 11: Independent Demand Ordering Systems

Question 1

Rules for reordering can include:
A) Order when needed
B) Order every month
C) Order when stock falls to a predetermined level
D) All of the above

Answer 1

All of the above

Question 2

Systems used to determine when to order are:
A) Order point system and periodic review system
B) Periodic review system and MRP
C) MRP and order point system
D) Order point system, periodic review system, and MRP

Answer 2

Order point system, periodic review system, and MRP

Question 3

For a particular item, the average demand is 100 units a week and the lead time if four weeks. If an order is placed when there are \_\_\_\_\_\_\_\_\_ units on hand, on average, there will be enough stock on hand to last until the new stock arrives.
A) 400
B) 100
C) 300
D) 1200

Answer 3

400

Question 4

Why is demand during lead time important?
A) It is the only time a stockout can occur.
B) If demand is greater than expected, there could be a stockout.
C) Both of the above
D) Neither of the above

Answer 4

Both of the above

Question 5

The average inventory for a period is equal to:
A) Opening inventory plus ending inventory
B) Opening inventory plus ending inventory divided by 2
C) Opening inventory divided by 2, plus the ending inventory
D) Ending inventory divided by 2, plus the opening inventory

Answer 5

Opening inventory plus ending inventory divided by 2

Question 6

The safety stock required depends on:
A) Variability of demand during lead time
B) Frequency of reorder
C) Service level desired
D) All of the above

Answer 6

All of the above

Question 7

The most common, predictable pattern of the distribution of variation in demand is:
A) The normal or bell curve
B) A bimodal distribution
C) A scatter plot distribution
D) Random dispersion

Answer 7

The normal or bell curve

Question 8

Question 8.
The normal curve is described by _________________.
A) the central tendency or average
B) the variation or dispersion of the actual values about the average
C) the range of values
D) both the central tendency or average and the variation or dispersion of the actual values about the average

Answer 8

both the central tendency or average and the variation or dispersion of the actual values about the average

Question 9

\_\_\_\_\_\_\_\_\_\_\_ is a statistical value that measures how closely the individual values cluster about the average
A) Standard deviation
B) Dispersion
C) Mean
D) Variation

Answer 9

Standard deviation

Question 10

Stockouts can result in:
A) A decrease in back-orders
B) Increased sales
C) Lost customers
D) A decrease in future safety stocks

Answer 10

Lost customers