FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Inventory Management

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Suppose that a newspaper stand is operating under the following conditions;papers cost $.4,have no salvage value,and sell for $.80.If the salvage value is increased by $.1,what is the increase in service level?

A) .5
B) 0
C) .07
D) 1
E) unable to determine given only the above information

F) A) and E)
G) A) and B)

Correct Answer

verified

Show Answer

Question 42

Essay

Review LaterAdd Note

Review Later

Holding costs are $35 per unit per year,the ordering cost is $120 per order,and sales are relatively constant at 300 per month.What is the optimal order quantity? What are the annual inventory management costs?

Correct Answer

verified

Order size is Q∗ = = 157.12 o...

View Answer

Show Answer

Question 43

Essay

Review LaterAdd Note

The inventory management costs for a certain product are S = $8 to order,and H = $1 to hold for a year.Annual demand is 2400 units.Consider the following ordering plans: (a)order all 2400 at one time, (b)order 600 once each quarter,and (c)order 200 once each month.Calculate the annual costs associated with each plan.Plot these values.Is there another plan,cheaper than any of these? Calculate this,and plot it (plot at least five points)on the grid below.Label your graph carefully.

Huckaby Motor Services,Inc.rebuilds small electrical items such as motors,alternators,and transformers,all using a certain type of copper wire.The firm's demand for this wire is approximately normal,averaging 20 spools per week,with a standard deviation of 6 spools per week.Cost per spool is $24;ordering costs are $25 per order;inventory handling cost is $4.00 per spool per year.Acquisition lead time is four weeks.The company works 50,5-day weeks per year. a.What is the optimal size of an order,if minimization of inventory system cost is the objective? b.What are the safety stock and reorder point if the desired service level is 90%?

What is a reorder point?

Explain what "decoupling" means in the context of inventory management.

Perform an ABC analysis on the following set of products.

Most inventory models attempt to minimize

The primary purpose of the basic economic order quantity model shown below is Q∗ =

Lead time for one of Montegut Manufacturing's fastest moving products is 4 days.Demand during this period averages 100 units per day.What would be an appropriate re-order point?

Which of these statements about the production order quantity model is false?

Safety stock in inventory systems depends only on the average demand during the lead time.

In the basic economic order quantity model and in the production order quantity model,optimal behaviour occurs where annual setup costs equal annual holding costs.Is this a coincidence,or a fundamental element of these models? Answer in a well-constructed paragraph.

One advantage of cycle counting is that it maintains accurate inventory records.

In the quantity discount model,the cost of acquiring goods (product cost)is not a factor in determining lot size.

The demand for automobiles would be considered an independent demand.

For a certain item,the cost-minimizing order quantity obtained with the basic EOQ model was 200 units and the total annual inventory (carrying and setup) cost was $600.The inventory carrying cost per unit per year for this item is

Consider a local club selling Christmas trees.If demand is normal with a mean of 200 and a standard deviation of 50,how many trees should the club stock if service level must be greater than 95%?

Which category of inventory holding costs is much higher than average for rapid-change industries such as PCs and cell phones?

A firm that makes electronic circuits has been ordering a certain raw material 250 ounces at a time.The firm estimates that carrying cost is 30% per year,and that ordering cost is about $20 per order.The current price of the ingredient is $200 per ounce.The assumptions of the basic EOQ model are thought to apply.For what value of annual demand is their action optimal?