Operations Management

Question 1

Which of the following is usually included as an inventory holding cost?

Answer 1

Breakage

Question 2

What is the basic purpose of inventory analysis?

Answer 2

To specify when items should be ordered and how large the order should be.

Question 3

ABC inventory classification schemes divide inventory items into three groupings. What are these groupings
usually based upon?

Answer 3

Dollar Volume

Question 4

Under a periodic review system, enough inventory must be carried to protect against stock out for
the ___________.

Answer 4

Replenishment lead time plus the review period

Question 5

Using the ABC classification system for inventory, which of the following is a true statement?

Answer 5

The “A” items are of high dollar volume

Question 6

Which of the following is not necessary to compute the order quantity using the fixed-time period model with
safety stock?

Answer 6

Ordering cost

Question 7

. Which of the following is not an assumption of the basic fixed-order quantity inventory model?

Answer 7

Diminishing returns to scale of holding inventory

Question 8

Which of the following is a perpetual system for inventory management?

Answer 8

Fixed-order quantity

Question 9

The master production schedule is typically stated as:

Answer 9

Specific finished goods

Question 10

The next level down in the planning process after development of the aggregate plan is the ____________.

Answer 10

Master production schedule

Question 11

In a level production plan, equipment capacity is set equal to

Answer 11

Average demand

Question 12

An advantage of the chase aggregate plan is __________.

Answer 12

Minimizes finished goods holding costs

Question 13

What type of aggregate plan keeps a stable workforce and uses backorders to compensate for
excess demand needs?

Answer 13

Level

Question 14

Which of the following is not an input to the aggregate planning process?

Answer 14

Master production schedule

Question 14

Which of the following is an input to the master production schedule (MPS)?

Answer 14

The aggregate plan

Question 15

Which of the following is one of the main purposes of a MRP system?

Answer 15

To determine the amount of materials needed to produce each end item

Question 16

Which of the following is an input file necessary to run an MRP system?

Answer 16

Bill of materials (BOM) file

Question 17

MRP systems seek to achieve which of the following?

Answer 17

Determine the number of demand dependent items needed

Question 18

Which of the following is considered a primary report in an MRP system?

Answer 18

Planned order schedules

Question 19

Under the lot-for-lot (L4L) lot sizing technique as used in MRP, we would expect which of the following?

Answer 19

Minimized carrying costs

Question 20

A computer-based information system designed to manage dependent demand inventory is ____________.

Answer 20

Material requirements planning

Question 21

The _________ is (are) checked for the materials on hand and those that need to be
procured.

Answer 21

Inventory records

Question 22

In MRP, the starting points for each part and material needed to accomplish the master
production schedule are the ____________.

Answer 22

Gross requirements

Question 23

The time interval necessary to either manufacture or purchase an item is its _____________.

Answer 23

Lead time

Question 24

For any period the beginning inventory, plus any replenishment orders due, less the gross
requirement equals is called the ______________.

Answer 24

Projected available quantity

Question 24

For every scheduled receipt in an MRP table, there is also in the organization a(n)

Answer 24

Order that has been placed but not received

Question 25

The MRP file that contains data on specific materials used to make final products and their
correct quantities is the ____________.

Answer 25

Bill of materials file