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##### Economics HomeWork mcq

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Question;91. Daily usage is exactly 60 gallons per day. Lead;time is normally distributed with a mean of 10 days and a;standard deviation of 2 days. What is the standard deviation;of demand during lead time?;A. 60 x 2;B. 60 times the square root of 2;C. 60 times the square root of 10;D. 60 x 10;E. none of the above;92. Lead time is exactly 20 days long. Daily demand is;normally distributed with a mean of 10 gallons per day and;a standard deviation of 2 gallons. What is the standard;deviation of demand during lead time?;A. 20 x 2;B. 20 x 10;C. 2 times the square root of 20;D. 2 times the square root of 10E. none of the;above;93. All of the following are possible reasons for using;the?xed order interval model except;A. Supplier policy encourages use.;B. Grouping orders can save in shipping costs.;C. The required safety stock is lower than with an;EOQ/ROP model.;D. It is suited to periodic checks of inventory levels;rather than continuous monitoring.;E. Continuous monitoring is not practical.;94. Which of these products would be most apt to;involve the use of a single-period model?;A. gold coins;B. hammers;C. fresh?sh;D. calculators;E. frozen corn;95. In a single-period model, if shortage and excess;costs are equal, then the optimum service level is;A. 0;B..33;C..50;D..67;E. none of these;96. In a single-period model, if shortage cost is four;times excess cost, then the optimum service level is;percent.;A. 100;B. 80;C. 60;D. 40;E. 20;97. In the single-period model, if excess cost is;double shortage cost, the approximate stockout risk, assuming an;optimum service level, is ___ percent.;A. 100;B. 67;C. 50;D. 33;E. 5;98. If, in a single-period inventory situation, the;probabilities of demand being 1, 2, 3, or 4 units are.3,.3,.2, and.;2, respectively. If two units are stocked, what is the;probability of selling both of them?;A..5;B..6;C..7;D..8E. none of these;99. The management of supply chain inventories focuses;on;A. internal inventories;B. external inventories;C. both internal and external inventories;D. safety stock elimination;E. optimizing reorder points;100. An operations strategy for inventory management;should work towards;A. increasing lot sizes;B. decreasing lot sizes;C. increasing safety stocks;D. decreasing service levels;E. increasing order quantities;101. Cycle stock inventory is intended to deal with;A. excess costs;B. shortage costs;C. stockouts;D. expected demand;E. quantity discounts;102. An operations strategy which recognizes high;carrying costs and reduces ordering costs will result in;A. unchanged order quantities;B. slightly decreased order quantities;C. greatly decreased order quantities;D. slightly increased order quantities;E. greatly increased order quantities;103. The need for safety stocks can be reduced by an;operations strategy which;A. increases lead time;B. increases lead time variability;C. increases lot sizes;D. decreases ordering costs;E. decreases lead time variability;104. If average demand for an item is 20 units per day;safety stock is 50 units, and lead time is four days, the;ROP will be;A. 20;B. 50;C. 70;D. 80;E. 130;105. With an A-B-C system, an item that had a high;demand but a low annual dollar volume would probably be;classi?ed as;A. A;B. B;C. C;D. none of these;106. The?xed order interval model would be most likely;to be used for this situation;A. A company has switched from mass production to lean;production.;B. Production is done in batches.;C. Spare parts are ordered when a new machine is;purchased.;D. Grouping orders can save shipping costs.;E. none of these;107. Which item would be least likely to be ordered;under a?xed order interval system?;A. textbooks at a college bookstore;B. auto parts at an assembly plant;C. cards at a gift shop;D. canned peas at a supermarket;E. none of these;108. Which one of these would not be a factor in;determining the reorder point?;A. the EOQ;B. the lead time;C. the variability of demand;D. the demand or usage rate;E. all are factors;109. A car rental agency uses 96 boxes of staples a;year. The boxes cost $4 each. It costs $10 to order staples, and;carrying costs are $0.80 per box on an annual basis.;Determine;(A) the order quantity that will minimize the sum of;ordering and holding boxes of staples;(B) the annual cost of ordering and carrying the boxes of;staples;110. A service garage uses 120 boxes of cleaning cloths;a year. The boxes cost $6 each. Ordering cost is $3 and;holding cost is 10 percent of purchase cost per unit on an;annual basis.;Determine;(A) The economic order quantity;(B) The total cost of carrying the cloths (excluding;purchase price)(C) The average inventory;111. A shop that makes candles offers a scented candle;which has a monthly demand of 360 boxes. Candles can;be produced at a rate of 36 boxes per day. The shop operates;20 days a month. Assume that demand is uniform;throughout the month. Setup cost is $60 for a run, and;holding cost is $2 per box on a monthly basis.;Determine the following;(A) the economic run size;(B) the maximum inventory;(C) the number of days in a run;112. Estimated demand for gold-?lled lockets at Sam's;Bargain Jewelry and Housewares is 2,420 lockets a year.;Manager Veronica Winters has indicated that ordering cost is;$45, and that the following price schedule applies: 1;to 599 lockets, $.90 each, 600 to 1,199 lockets, $.80 each;and 1,200 or more, $.75 each. What order size will;minimize total cost if carrying cost is $.18 per locket on;an annual basis?;113. Suppose that you are the manager of a production;department that uses 400 boxes of rivets per year. The;supplier quotes you a price of $8.50 per box for an order;size of 199 boxes or less, a price of $8.00 per box for;orders of 200 to 999 boxes, and a price of $7.50 per box for;an order of 1,000 or more boxes. You assign a;holding cost of 20 percent of the price to this inventory.;What order quantity would you use if the objective is to;minimize total annual costs of holding, purchasing, and;ordering? Assume ordering cost is $80/order.;114. The operator of a concession at a downtown;location estimates that he will sell 400 bags of circus peanuts;during a month. Carrying costs are 17 percent of unit price;and ordering cost is $22. The price schedule for bags;of peanuts is: 1 to 199, $1.00 each, 200 to 499, $.94 each;and 500 or more $.87 each. What order size would be;most economical?;115. A dry cleaning?rm uses an average of 20 gallons;of cleaning?uid a day. Usage tends to be normally;distributed with a standard deviation of two gallons per;day. Lead time is four days, and the desired service level is;92 percent. What amount of safety stock is appropriate if a;?xed order size of 600 gallons is used?;116. Suppose that usage of cooking oil at Harry's Fish;Fry is normally distributed with an average of 15 gallons/;day and a standard deviation of two gallons/day. Harry has;just?red the manager and taken over operating the;restaurant himself. Harry has asked you to help him decide;how to reorder cooking oil in order to achieve a service;level which is seven times the risk of stockout (7/8). Lead;time is eight days. Assume that cooking oil can be;ordered as needed.;117. A bakery's use of corn sweetener is normally;distributed with a mean of 80 gallons per day and a standard;deviation of four gallons per day. Lead time for delivery of;the corn sweetener is normal with a mean of six days;and a standard deviation of two days. If the manager wants a;service level of 99 percent, what reorder point should;be used?;118. A manager reorders lubricant when the amount;on-hand reaches 422 pounds. Average daily usage is 45;pounds, which is normally distributed with a standard;deviation of three pounds per day. Lead time is nine days.;What is the risk of a stockout?;119. Given the following information:Order quantity =;300, = 20 units, desired lead time service level =.86.;Find;(A) the expected number of units short per cycle;(B) the annual service level;120. A company can produce a part it uses in an;assembly operation at the rate of 50 an hour. The company;operates eight hours a day, 300 days a year. Daily usage of;the part is 300 parts. The company uses the part every;day. The run size is 6,000 parts. The annual holding cost is;$2 per unit, and setup cost is $100.;(A) How many runs per year will there be?;(B) While production is occurring, how many parts per day;are being added to inventory?;(C) Assuming that production begins when there are no parts;on hand, what is the maximum number of parts in;inventory?;(D) The machine is dedicated to this product. Every so;often, preventive maintenance, which requires six working;days, must be performed on it. Does this interrupt;production cycles, or is there enough time between cycles to;perform the maintenance? Explain.

Paper#56774 | Written in 18-Jul-2015

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