ISDS DSM Ch 12 Flashcards
A system that keeps track of each withdrawal or addition to inventory continuously is __________.
a. a fixed-period inventory system
b. a perpetual inventory system
c. a fixed-quantity system
b. a perpetual inventory system
One use of inventory is __________.
a. to ensure that item cost is maximized
b. to provide a hedge against inflation
c. to tightly link production and distribution processes
b. to provide a hedge against inflation
An inventory decision rule states “when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered.” Which of the following statements is true?
a. 14 is the reorder point, and 100 is the order quantity.
b. 100 is the reorder point, and 14 is the order quantity.
c. 14 is the safety stock, and 100 is the reorder point.
a. 14 is the reorder point, and 100 is the order quantity
A system that triggers ordering on a uniform time basis is called a _______.
a. a reorder point system
b. a fixed-quantity system
c. a fixed-period system
c. a fixed-period system
Which of the following should be higher in P systems than Q systems?
a. Order size
b. Demand
c. Safety stock
c. Safety stock
If demand is not uniform and constant, the stockout risks can be controlled by __________.
a. increasing the EOQ
b. adding safety stock
c. placing an extra order
b. adding safety stock
A disadvantage of the fixed-period inventory system is that
a. a stockout is possible.
b. it involves higher ordering costs than fixed-quantity inventory systems.
c. additional inventory records are required.
a. a stockout is possible.
Inventory management policies based on ABC analysis might include investing _______.
a. the most time verifying the accuracy of records for B items
b. extra care in forecasting for C items
c. more in supplier development for A items
c. more in supplier development for A items
Extra units that are held in inventory to reduce stockouts are called __________.
a. reorder point
b. safety stock
c. just-in-time inventory
b. safety stock
Which of these conditions is not necessary for the economic order quantity model to be valid?
a. The item has a constant lead time.
b. The item has a constant order cost.
c. The item has a constant purchase price.
c. The item has a constant purchase price.
Generally, inventory types are divided into four main categories. Which of the following is not one of the four main categories of inventory?
a. Safety stock inventory
b. Raw material inventory
c. Work-in-process inventory
a. Safety stock inventory
A production facility is trying to determine the best batch size for an item that is produced intermittently. This item has an annual demand of 1,000 units, an annual carrying cost of $10 per unit, and a setup cost of $400. They operate 50 weeks per year, and can produce 40 units per week. What is the best batch size for this item?
a. 283
b. 400
c. 800
b. 400
The two most important inventory-based questions answered by the typical inventory model are ______.
a. when to place an order and how many of an item to order
b. how many of an item to order and what is the cost of this order
c. how many of an item to order and with whom the order should be placed
a. when to place an order and how many of an item to order
Inventory record accuracy would be decreased by __________.
a. using ABC analysis
b. increasing stockroom accessibility
c. increasing reorder points
b. increasing stockroom accessibility
Cycle counting __________.
a. is a process by which inventory records are verified for accuracy
b. provides a measure of inventory turnover
c. assumes that the most frequently used item must be counted more frequently
a. is a process by which inventory records are verified for accuracy
