1. Manufacturers usually carry work-in-process inventory. True or False ?
2. Companies belonging to the same industry segment should have the same inventory turns. True or False ?
3. The goal of inventory management is to have the right ______, in the right _______, at the right _______.
A. product, range, season
B. price, place, supplier
C. price, range, season
D. product, place, time
4. C&A has on average $6000 in inventory and its daily sales are $200. What are C&A’s weekly inventory turns (assuming demand occurs seven days a week)?
A. 85.7
B. 28.6
C. .23
D. 0.3
5. C&A sells two kinds of sandwiches: regular and deluxe. Each regular sandwich costs $1 to make and each deluxe sandwich costs $2 to make. On average, C&A has 5 regular and 10 deluxe sandwiches in inventory and 0.5 days-of-supply. How many sandwiches does C&A expect to sell each day?
A. 15
B. 30
C. 50
D. 100
6. A supply chain with a distributor has more product handling than one without a distributor. True or False?
7. Lead time is a way to measure the availability of inventory. True or False?
8. A supply chain for goods and services consists of a __________ of firms and locations that begins with __________ and ends with _________.
A. merging, public entities, private entities
B. merging, private entities, public entities
C. network, final users, raw materials
D. network, raw materials, final users
9. A supply chain that involves suppliers of raw materials in Germany, manufacturers in China, distributors in Spain, and retailers in the United States has ______ different levels or stages.
A. 5
B. 4
C. 3
D. 2
10. Company A provides corn to Company B to make into corn syrup. Company B sells its corn syrup to Company C, who makes ice cream for sale at Company D. Company A is a ___________ in the supply chain of ice cream.
A. tier 2 supplier
B. tier 1 supplier
C. manufacturer
D. retailer
11. As demand increases, the optimal economic order quantity increases at the same rate of demand. True or False?
12. A firm's ordering cost per year is independent of its order quantity decision. True or False?
13. The parameters of the economic order quantity (EOQ) model include all of the following except:
A. order quantity.
B. demand rate.
C. holding cost per unit per year.
D. ordering cost per order.
14. Company A sells 600 bottles of a dietary supplement per week at $100 per bottle. The supplement is ordered from a supplier who charges Company A $40 per order and $50 per bottle. Company A’s annual holding cost percentage is 30%. Assume Company A operates 50 weeks in a year. What is the economic order quantity?
A. 200
B. 400
C. 500
D. 800
15. Store A purchases cases of fertilizer for its lawn-care business from a supplier who charges Store A $30 per order and $50 per case. Each case consists of five bags of fertilizer. Store A needs 2000 bags of fertilizer a year. Store A’s annual holding costs are 30%. If Store A’s order quantity is 40 cases, what is its average inventory level?
A. 89
B. 45
C. 40
D. 20
16. A critical ratio of 0.8 means there is an 80% chance that demand is less than or equal to the optimal order quantity. True or False?
17. Expected profit is a direct measure of how well a company serves its customers. True or False?
18. Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives a 70% discount for its bread at the end of the day. What is the salvage value of its bread?
A. $2.00
B. $0.60
C. $0.50
D. $0.10
19. Demand is modeled with a normal distribution that has a mean of 300 and a standard deviation of 50. What is the probability that demand is 400 or less?
A. 97.7%
B. 95.4%
C. 47.7%
D. 2.3%
20. The difference between the __________ and _____________ is the mismatch costs in the newsvendor model.
A. maximum profit, expected profit
B. maximum profit, expected sales
C. minimum profit, expected profit
D. minimum profit, expected sales