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economics data bank




Question;1. One important use of inventories in manufacturing is;to decouple operations through the use of work in process;inventories.;True False;2. The objective of inventory management is to minimize;the cost of holding inventory.;True False;3. A retail store that carries twice the inventory as;its competitor will provide twice the customer service level.;True False;4. The overall objective of inventory management is to;achieve satisfactory levels of customer service while;keeping inventory costs reasonable.;True False;5. The two main concerns of inventory control relate to;the costs and the level of customer service.;True False;6. To provide satisfactory levels of customer service;while keeping inventory costs within reasonable bounds, two;fundamental decisions must be made about inventory: the;timing and size of orders.;True False;7. In the EOQ formula, holding costs under 10% are;expressed as percentages, above 10% are expressed as;annual unit costs.;True False;8. DVD recorders would be an example of independent;demand items.;True False;9. Reorder point models are primarily used for;dependent demand items.;True False;10. An example of inventory holding cost is the cost of;moving goods to temporary storage after receipt from a;supplier.;True False;11. Decoupling operations applies to the railroad;industry.;True False;12. Interest, insurance, and opportunity costs are all;associated with holding costs.;True False;13. The A-B-C approach involves classifying inventory;items by unit cost, with expensive items classi?ed as ?A;items and low cost items classi?ed as ?C' items.;True False;14. An inventory buffer adds value and lowers cost in;all supply chains.;True False;15. In the A-B-C approach, C items typically represent;about 15 percent of the number of items, but 60 percent of;the dollar usage.;True False;16. EOQ inventory models are basically concerned with;the timing of orders.;True False;17. The average inventory level is inversely related to;order size.;True False;18. The average inventory level and the number of;orders per year are inversely related: As one increases, the;other decreases.;True False;19. The EOQ should be regarded as an approximate;quantity rather than an exact quantity. Thus, rounding the;calculated value is acceptable.;True False;20. Carrying cost is a function of order size, the;larger the order, the higher the inventory carrying;cost. True False;21. Understocking an inventory item is a sure sign of;inadequate inventory control.;True False;22. Annual ordering cost is inversely related to order;size.;True False;23. The total cost curve is relatively?at near the;EOQ.;True False;24. Because price isn't a factor in the EOQ formula;quantity discounts won't affect EOQ calculations.;True False;25. In the quantity discount model, if holding costs;are given as a percentage of unit price, a graph of the total cost;curves will have the same EOQ for each curve.;True False;26. In the quantity discount model, the optimum;quantity will always be found on the lowest total cost curve.;True False;27. ROP models indicate to managers the time between;orders.;True False;28. When to order can be calculated by the ROP and;expressed as a quantity.;True False;29. The rate of demand is an important factor in;determining the ROP.;True False;30. The inventory value of the supply chain exceeds the;inventory value of the organization's work in process;inventory.;True False


Paper#56773 | Written in 18-Jul-2015

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