__________________ is a continuing reconciliation of

inventory with inventory records.

Bottleneck analysis

ABC analysis

Work-in-process management

Cycle Counting

Economic order quantity (EOQ) analysis

Lead time for one of Montegut Manufacturing’s fastest moving

products is 4 days. Daily demand during this period is 100 units per day. What

would be an appropriate re-order point?

25 units

600 units

100 units

400 units

One of the functions of inventory is to:

consistently purchase the least expensive and lowest quality

material.

not take advantage of quantity margins.

lease warehouse space in instead of purchasing it.

take advantage of quantity discounts.

What is the value of the bullwhip measure for a company with

a variance of demand equal to 450, and a variance of orders equal to 400?

0.889

1.125

22.5

0.044

50

A given operation uses the POQ model. Annual setup costs have been computed to be

$1000. What is the annual holding cost?

$1,000

cannot determine

$1,500

$1,750

In the basic EOQ model, if D=6000 per year, S=$100, H=$5 per

unit per year, the economic order quantity is approximately:

24

490

310

141

100

$2,000

Consider a firm with an annual net income of $20 million,

revenue of $60 million and cost of goods sold of $25 million. If the balance

sheet amounts show $2 million of inventory and $500,000 of property, plant

& equipment, how many weeks of supply does the firm hold?

3.20

0.08

2.60

4.16

12.50

__________________ are inventories devoted to keeping

machinery and processes productive.

ABC inventory

Finished-Goods inventory

MRO (Maintenance/Repair/Operating) inventory

Work-in-process (WIP) inventory

Raw Material inventory

The assumptions of the production order quantity model are

met in a situation where annual demand is 3650 units, setup cost is $50,

holding cost is $12 per unit per year, the daily demand rate is 10 and the

daily production rate is 100. The production order quantity for this problem is

approximately:

548

144

184

365

139

_________________ has been purchased but not processed.

Work-in-process (WIP) inventory

Finished-Goods inventory

ABC inventory

MRO (Maintenance/Repair/Operating) inventory

Raw Material inventory

A container of bolts, currently located in Houston, TX,

needs to be delivered to a facility in Sioux Falls, SD. The standard ground shipment method takes

three days. However, for an additional

charge of $30.00, the container can be sent by two-day air. The holding cost per day for this type of

item has been estimated at $21.09. Which

shipping option is more economical?

both shipments are more economical

neither shipment is more economical

two-day air shipment

standard three day ground shipment

• Guemmer

Specialty Foods can produce their famous cherry pies at a rate of 1650 cases

per day (this is the daily production rate). The firm distributes the pies to

regional stores and restaurants at a steady rate of 250 cases per day (this is

the daily demand rate). The cost of each production setup is $320. Annual holding costs are $11.50 per case per

year. Annual demand is 62,500

cases. Assume 250 working days per

year. Assume the POQ (Production Order

Quantity) model is used by Guemmer Specialty Foods.

Refer to Scenario 5.

What is the number of production runs per year?

o

20.23

o

250

o

55.23

o

30.87

__________________ divides on-hand inventory into three

classifications on the basis of annual dollar volume.

Raw Material analysis

MRO (Maintenance/Repair/Operating) analysis

ABC analysis

Work-in-process (WIP) analysis

Finished-Goods analysis

A given operation uses the POQ model. Annual holding cost has been computed to be

$500. What is the annual setup cost?

$2,000

$500

cannot determine

$1,000

$750

Guemmer Specialty Foods can produce their famous cherry pies

at a rate of 1650 cases per day (this is the daily production rate). The firm

distributes the pies to regional stores and restaurants at a steady rate of 250

cases per day (this is the daily demand rate). The cost of each production

setup is $320. Annual holding costs are

$11.50 per case per year. Annual demand

is 62,500 cases. Assume 250 working days

per year. Assume the POQ (Production

Order Quantity) model is used by Guemmer Specialty Foods.

Refer to Scenario 5.

What is the optimal Production Order Quantity (POQ)?

320.33

1650

250

2024.70